vat details on invoices for low income companies

rubadubdub_2

Hi
I'm not sure this is the correct forum but it seemed like the best bet. I have a question about vat and the vat offices are unfortunately closed for the bank holiday.

My builder has issued me with an invoice which had no vat number on it. I've queried it but he says it he is below the threshold and has never had a vat registration number. Hence he has no number to put on the invoice. He was quite open about it.

The invoice needs to be legitimate as the building work is subject to litigation against a conveyencor who represented both parties and covered up the fact some work had not been approved by building control. Hence my scrutiny of the paperwork.

Should invoices from small companies have vat numbers or is it perfectly reasonable that there is none on my invoice?

The timing is very irritating as I could have checked with hmrc myself but for the bank holiday. I agreed to pay the builder tomorrow and was supposed when there was no mention of vat on the invoice he sent this afternoon.

Thanks for your help.

Owain_Moneysaver

If the builder's turnover is below £81,000 he doesn't have to register for VAT, won't have a VAT registration number, and will not charge VAT on his invoices.

rubadubdub_2

Great that's just what I wanted to know. Thanks.

thenudeone

Slightly off-topic, but if you are presented with an invoice from a small trader bearing a VAT registration number, but suspect they may not be registered and are just pocketing the VAT themselves, you can check that the VAT number belongs to them here:
http://ec.europa.eu/taxation_customs/vies/?locale=en

It's intended for businesses to use, so you'll need to get a valid number (from an electricity bill or a supermarket receipt, for example) and enter it as the requestor's VAT number

Such fraud is a very simple way for a small trader to make a 20% markup and deprives genuine taxpayers of the revenue their due.

I am not a fan of paying taxes but I am even less happy with others getting away without paying their share of the tax burden.

JasonLVC

thenudeone wrote: »

Slightly off-topic, but if you are presented with an invoice from a small trader bearing a VAT registration number, but suspect they may not be registered and are just pocketing the VAT themselves, you can check that the VAT number belongs to them here:
http://ec.europa.eu/taxation_customs/vies/?locale=en

It's intended for businesses to use, so you'll need to get a valid number (from an electricity bill or a supermarket receipt, for example) and enter it as the requestor's VAT number

Such fraud is a very simple way for a small trader to make a 20% markup and deprives genuine taxpayers of the revenue their due.

I am not a fan of paying taxes but I am even less happy with others getting away without paying their share of the tax burden.

Great tip, although you don't actually need to input a 2nd VAT number (as requestor) to get an answer from the website, you can just enter the one VAT number you wish to check and leave the second box blank and it will still give you the results.

The purpose of the 2nd box is that when a business s dealing with a foreign entity it must check the validity of foreign VAT numbers, by entering their own business number at the same time and printing it of, the business then has proof that it checked. So if later on during a VAT inspection HMRC are arguing the sale should not have ben VAT free, the business can whip out the paperwork and show they did at least check. As checking means they took reasonable care, then HMRC cannot argue you were careless.

AbbieCadabra

rubadubdub wrote: »

My builder has issued me with an invoice which had no vat number on it. I've queried it but he says it he is below the threshold and has never had a vat registration number. Hence he has no number to put on the invoice. He was quite open about it.

if he's given that as an explanation, i'd say he's just confused with how VAT works & he's not done it deliberately (hopefully anyway, but you never know. it does seem weird to know about the threshold, but then still charge vat if not registered).

either way, will you/have you queried this with HMRC? you'd probably be doing him a favour as the longer he charges vat when he shouldn't, the worse it will be when HMRC eventually do find out. if he's been doing this for years, he'll have unpaid VAT that he's been paid that's never been declared/paid to HMRC plus possible fines/penalties too.

zygurat789

AbbieCadabra wrote: »

if he's given that as an explanation, i'd say he's just confused with how VAT works & he's not done it deliberately (hopefully anyway, but you never know. it does seem weird to know about the threshold, but then still charge vat if not registered).

either way, will you/have you queried this with HMRC? you'd probably be doing him a favour as the longer he charges vat when he shouldn't, the worse it will be when HMRC eventually do find out. if he's been doing this for years, he'll have unpaid VAT that he's been paid that's never been declared/paid to HMRC plus possible fines/penalties too.

It would appear that the builder has not charged VAT. It would appear that the OP was agitated because there was no VAT. If the builder 's turnover is less than £81K then he need not be registered.
He appears to be doing everything correctly and is not in the least confused.

AbbieCadabra

zygurat789 wrote: »

It would appear that the builder has not charged VAT. It would appear that the OP was agitated because there was no VAT. If the builder 's turnover is less than £81K then he need not be registered.
He appears to be doing everything correctly and is not in the least confused.

Correct! Sorry op, i'd mis-read that he'd charged you vat, but no vat no. was detailed on the invoice.

It's been a long day