Painter decorator VAT Issue

Smallholdertoo

I was quoted by a local painter and decorator to decorate a cottage. When I questioned his high fees to decorate the house he said his costs were high as he had to pay a staff member and he had to charge VAT. He did reduce his quote and did the work (the quote was verbal). When I received the invoice there was no VAT number and no mention of VAT. When questioned he said that he was not VAT registered. I have withheld the VAT element and explained why. Was I right to do so. The invoice was for £1650 for what equated to approx 3 days work - I think it likely that he is above the VAT threshold.

Any views

sjbrun

You should pay the amount in full on the invoice if you are happy with his work. If not ask him to come back and fix.

His taxes are his problem. If you think he is avoiding VAT then pay the invoice in full and report your suspicions to HMRC.

You can't really use this as an excuse not to pay in full.

Vectis

I guess you can expect a Letter Before Action followed by a MCOL unless you pay the full amount.

Whether he's registered for VAT or not, you still have the same amount to pay. It's not up to you to deduct money because you disagree with his VAT status, that's for HMRC to sort out. Either way, you still have to pay the full amount.

Smallholdertoo

My response would be that had I known he was not VAT registered I would have offered him the net of VAT figure at the start.So his fraud did make me worse off.

Savvy_Sue

Smallholdertoo wrote: »

The invoice was for £1650 for what equated to approx 3 days work

Even if that did not include the cost of materials, that doesn't seem outrageously high to me for two people working for three days.

martindow

Vectis wrote: »

I guess you can expect a Letter Before Action followed by a MCOL unless you pay the full amount.

Whether he's registered for VAT or not, you still have the same amount to pay. It's not up to you to deduct money because you disagree with his VAT status, that's for HMRC to sort out. Either way, you still have to pay the full amount.

I disagree. He's quoted £1350 + VAT. It now turns out that VAT has been added in 'error' as he's not VAT registered. He would be very silly to pursue a VAT payment that he's not entitled to.

I'd also have no qualms about letting HMRC know.

Pennywise

martindow wrote: »

I disagree. He's quoted £1350 + VAT. It now turns out that VAT has been added in 'error' as he's not VAT registered. He would be very silly to pursue a VAT payment that he's not entitled to.

I'd also have no qualms about letting HMRC know.

If his written quote shows vat separately or mentions VAT, then you'd be right, but if it doesn't, then there are no grounds for deducting an arbitrary amount that the payer regards as the vat element. So, OP, what does the written quote show?

cavework

Would you be happy to pay him minus the VAT part of his invoice?

phill99

I run a property maintenance company and am VAT registered.


If he is charging VAT he MUST provide a VAT number. You can then check that it is a valid VAT number by ringing HMRC. If he can't provide this, he is committing fraud.


Ask for his number and check it. If he can't do this or it is a false number, then only pay him the net amount. He is trying to deceive you.

booksurr

so the facts are :

1. the quote was VERBAL. A figure was mentioned and that figure was then reduced. Can you prove that the final amount of the verbal quote was + VAT ?

2. An invoice was issued which does not make any reference to VAT and you have established that the trader is not VAT registered. Therefore the invoice is perfectly valid and is for the amount payable since it does not contain any element of VAT, nor make a claim to so do.

3. if the invoice amount is the same as the quote then you have to pay it, since that is what you agreed to pay when you accepted the quote (albeit the quote is verbal so proof from either you or the decorator will be impossible)

4. if the invoice is more than the quote then you have grounds for a contract/commercial dispute over the final price since the quote should be the price for the job, and any variation to the price need to have been notified and agreed by you. Of course a verbal quote is worth the paper it is written on. If the difference is +20% on the quote, then it is purely coincidence, unless you can prove the claim is for "VAT" in which case that would be illegal as he is not registered.

fishybusiness

Agree with above.

If the invoice is does not show a VAT element, and has no VAT reg details, invoice is valid and should be paid.

There is no way of knowing how the person runs their business, there may be a VAT reg company and a non VAT reg company.

For such a sum of money Op should really have a written quote, and said painter ought to have supplied a quote for clarity.

Seems it a bit unprofessional on both sides.