Charged £550 two years on

Lulu0110

In 2013 I took a lease on a storage barn and was verbally told £125. When the invoices came each month they were £125 with zero vat. Last year they said the amount should have included VAT and i owed £550 ish. If they told me what the amount was and they invoiced without VAT can they suddenly decide that their mistake means I owe this?

SuperHan

No - if there was no mention of VAT at the time, it is assumed the price is VAT inclusive, so although they need to pay HMRC, you don't have to pay them.

Lulu0110

Thank you, though I neglected to mention the invoice was from the estate agent not the owner, does this change anything?

neilmcl

Lulu0110 wrote: »

Thank you, though I neglected to mention the invoice was from the estate agent not the owner, does this change anything?

Not in the slightest. All previous invoices are assumed to be inclusive of VAT, unless specified otherwise. It's not your problem, the estate agent will have to take the hit.

LABMAN

Just asking...do business contracts have to mention VAT?

pappa_golf

LABMAN wrote: »

Just asking...do business contracts have to mention VAT?

if you are a business , pay it and claim it back

antrobus

Lulu0110 wrote: »

In 2013 I took a lease on a storage barn and was verbally told £125. When the invoices came each month they were £125 with zero vat. Last year they said the amount should have included VAT and i owed £550 ish. If they told me what the amount was and they invoiced without VAT can they suddenly decide that their mistake means I owe this?

As a general rule, rent is exempt from VAT. So you would expect to receive an invoice for rent with zero vat. Unless that is, the landlord has exercised the option to tax.

See: https://www.gov.uk/government/publications/vat-notice-742a-opting-to-tax-land-and-buildings/vat-notice-742a-opting-to-tax-land-and-buildings#how-to-opt-to-tax

Obviously, if you are a VAT registered business, paying VAT on your rent doesn't matter, because you can reclaim it on your own return. Equally obviously, if you are a consumer of a non-VAT registered business, it does matter, because it means it's going to cost you 20% more.

Does it matter to you?

neilmcl

LABMAN wrote: »

Just asking...do business contracts have to mention VAT?

If you are a business and charge VAT then yes you must mention it on your invoices.

neilmcl

pappa_golf wrote: »

if you are a business , pay it and claim it back

Common misconception. You don't "claim back" VAT, you offset your liability from VAT sales against VAT purchases.

LABMAN

neilmcl wrote: »

If you are a business and charge VAT then yes you must mention it on your invoices.

Is there legislation you can point to...I'm not entirely convinced the OP is a 'consumer' and suspect this maybe a b2b contract?

Lulu0110

Not sure what a b2b contract is. As far as I simply see it, i was told a price and invoiced a price and then they realised they made a mistake and want me to pay for it. Whats to stop any person to make a bit more loot by saying whoops that was the wrong price, please pay more. Is it legal?