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VAT liability on small repair jobs under about £500
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katejo
Posts: 4,272 Forumite


in Cutting tax
I am always unclear about this. If I get a quote for a small repair job (under £500) and the quote doesn't include VAT, how do I know whether a tradesman is evading tax? Is it to do with his overall income in the year? Is there a difference between repair and installation of a new product/service? I always feel a bit uncomfortable about it.
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I am always unclear about this. If I get a quote for a small repair job (under £500) and the quote doesn't include VAT, how do I know whether a tradesman is evading tax? Is it to do with his overall income in the year? Is there a difference between repair and installation of a new product/service? I always feel a bit uncomfortable about it.
Is your concern from a moral standpoint or from point of view of you not getting into trouble?
On the latter I wouldn't concern myself - it's not your obligation to ensure that the tradesman pays his tax correctly, despite what the government would have you believe (though since they were banging the drum about this a year or so back it's been a little quieter on this front). That is as long as you don't willfully engage in aiding tax evasion - i.e. they say I'll knock X amount off and won't put it through the books, wink wink, nudge nudge! Not sure of specific legislation on that, but my instinct says don't get involved in that sort of exchange.
On the moral front it's not always easy to work out if somebody is VAT registered and even harder to work out if they ought to be. The liability to register is based on turnover - currently set at £79k for a (rolling) 12 month period. If it's a handyman/odd jobs man he's likely below this, if its a building firm with a few employees then almost certainly above.
There are a few special rules around new builds, but I would expect to see VAT on invoices for repairs and new installations if they are registered. Of course on the flip side if they are not registered then they should definitely not be adding "VAT" to their invoices.0 -
Is your concern from a moral standpoint or from point of view of you not getting into trouble?
On the latter I wouldn't concern myself - it's not your obligation to ensure that the tradesman pays his tax correctly, despite what the government would have you believe (though since they were banging the drum about this a year or so back it's been a little quieter on this front). That is as long as you don't willfully engage in aiding tax evasion - i.e. they say I'll knock X amount off and won't put it through the books, wink wink, nudge nudge! Not sure of specific legislation on that, but my instinct says don't get involved in that sort of exchange.
On the moral front it's not always easy to work out if somebody is VAT registered and even harder to work out if they ought to be. The liability to register is based on turnover - currently set at £79k for a (rolling) 12 month period. If it's a handyman/odd jobs man he's likely below this, if its a building firm with a few employees then almost certainly above.
There are a few special rules around new builds, but I would expect to see VAT on invoices for repairs and new installations if they are registered. Of course on the flip side if they are not registered then they should definitely not be adding "VAT" to their invoices.
It's more a moral/conscience standpoint. The estimate which I have received for a small roof repair doesn't mention VAT at all so I don't know if any is included. It is a local firm but I know nothing about their turnover. Nothing to do with new builds as it is a period house.0 -
What you should be concerned about is that when the invoice arrives it is NOT for the original estimate plus VAT.The only thing that is constant is change.0
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zygurat789 wrote: »What you should be concerned about is that when the invoice arrives it is NOT for the original estimate plus VAT.
I emailed the firm to ask if the estimate included VAT and have just got a reply to say that it is all inclusive.0 -
More importantly: WE should all be asking our self employed contractors, to prove they have the correct Public Liability Insurance, and perhaps professional indemnity insurance before we let them loose on our behalf.
Whether or not they are turning over enough to be VAT registered, and how much they might or might not be putting through the books, is so much less important morally as, to how they intend to pay a massive claim for damages due to some mistake or other.0 -
Their VAT status should be quite clear from their letterhead (assuming it's not a phone or 'back of an envelope' quote.No free lunch, and no free laptop0
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Then it sounds like it's not vat registered.
Or the firms not done their letterhead properly.
But if they're not vat registered, and aren't charging vat, I don't see the problem. Provided the turnover is under 79k, they do not have to register for vat, and indeed many wouldn't as it would increase the price they charge customers by 20 PC or they would have to take the 20pc hit themselves. I think the person telling you it was vat inclusive was probably confused.0 -
If you do get a VAT number it is worth checking that it is correct.
Check with Goolgle for access to sites that will check out a VAT number.
This is especially important if you were trying to reclaim VAT on a new build..0 -
Then it sounds like it's not vat registered.
Or the firms not done their letterhead properly.
But if they're not vat registered, and aren't charging vat, I don't see the problem. Provided the turnover is under 79k, they do not have to register for vat, and indeed many wouldn't as it would increase the price they charge customers by 20 PC or they would have to take the 20pc hit themselves. I think the person telling you it was vat inclusive was probably confused.0
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