Builder changing quote

Furts

Moving back to OP's post there is little alternative than to pay if the VAT Registration is genuine. The scenarios are;

1) the customer refuses to pay and the builder walks off

2) the customer has an oversite and has to find new builders to take on the work. When considering risks and desperation this work will cost more than the original builder would have charged. Quite likely a lot more, because the cheapest quoter who won the job is no longer in the picture.

MisterBaxter

I with 'the_r_sole' on this one. Small builders can have traded for years without hitting the VAT threshold then all of a sudden they get a couple a jobs over their normal workload that pushes them in to VAT territory. They are not incompetent tradesmen but are very often lacking when it comes to their accounts and it will usually be their accountant who picks through a couple of boxes of randomly filed documents and informs the builder that they now have a turnover that puts them over the VAT threshold. Assuming the builder is being honest, and so far the OP hasn't suggested that they aren't then it is likely that this situation has come out of the blue for the builder as well. Lots of small builders get themselves in trouble with HMRC because of poor quality accounting.

The builder quoted a figure without VAT which at the time of quoting was correct but once VAT registered VAT will have to be paid and it is the customer who pays. It's a bitter pill to swallow but options are limited.

The builder probably doesn't like it any more than the customer does as it means more admin and he is now less competitive than he was before (probably why he was winning more jobs in the first place).

If the OP wants more advice it may be worth half an hour with a solicitor who specialises in construction but I wouldn't hold out much hope for a legal solution that forces the builder to do the work without VAT; at best they may be able to get you out of the contract without penalty so that you can shop around for a cheaper quote for the completion of the project, although that brings its own set of problems.

EDIT:

Having read some of the other comments I think it is important to recognise that in no way is the builder changing his price for the works. He has reached an arbitrary limit imposed by the Government which means he now has to collect tax in the form of VAT from his customer and pass this on to the HMRC. I do agree that if it had been obvious that he was going to hit this threshold part way through a job he should have told the customer in advance so that an informed decision could have been made.