Do I have to pay VAT on fixtures & fittings on new builds

tiggit

Hey everyone,

I'm buying a new build and I was told when I was choosing my items that the VAT was included in the prices that were given on the day (I didn't get this in writing though) but prices were given to us.

I have now had the invoice through and they have added VAT on. These are extras like Kitchen Worktop upgrade £1675, Bathroom upgrades £325 etc.

I've seen some conflicting articles as to whether the builder has to pay VAT on these kind of items. Should they be charging VAT on our fixtures and fittings or not?

I'd really appreciate some help as the HMRC website is a little confusing.

Thank you have a great day.

Chris

Doozergirl

It really does depend on what those items are.

A kitchen worktop should be VAT free as part of the build. Bathroom tiles would be, but a cabinet (for example) wouldn't be.

I've never bought a new build but do those items go on to form part of the sale price or are they separate? I presume that only one transaction is allowed to be zero rated.

tiggit

They are all "fixed" to the house of that makes sense, for example:

- outside tap
- outside light
- kitchen worktops
- spotlights
- extra plug socket
- bathroom upgrade (higher spec toilet, hand basin, shower)
- kitchen handles

My argument would be that these should be VAT free, would there be any reason that they should have VAT added to them?

ComicGeek

I would have thought everything on that list would be VAT free to you as they are all being installed by the developer as part of the build. The developer will be claiming back any VAT on the supply of the items after completion (along with the rest of the materials of the house), and the labour costs would be zero rated still prior to completion.


Ask them about it, as I think it's a mistake.

Miss_Samantha

It's not really an issue of VAT but a bait and switch scam.

ComicGeek

Miss_Samantha wrote: »

It's not really an issue of VAT but a bait and switch scam.

No, it's a VAT issue, unless you're accusing the developers of VAT fraud? The developers aren't saying that the selected items aren't available and offering more expensive options, there's just confusion over whether VAT should be applied or not, and whether it was included at the initial pricing stage.

saajan_12

ComicGeek wrote: »

No, it's a VAT issue, unless you're accusing the developers of VAT fraud? The developers aren't saying that the selected items aren't available and offering more expensive options, there's just confusion over whether VAT should be applied or not, and whether it was included at the initial pricing stage.

There's two issues:
1) Should VAT be payable at all in this transaction?
2) The developers did bait and switch the price quoted from being inclusive to exclusive of VAT.

The developers first said the total price including VAT was A, now they are saying the total price including VAT is 120% x A.

societys_child

VAT is 120% x A

:huh: . . . really?

davidmcn

saajan_12 wrote: »

VAT is 120% x A.

societys_child wrote: »

:huh: . . . really?

No, the total price including VAT is 120% x A.

The VAT is 20% x A. But you have to add 100% of A to get the total price.

Miss_Samantha

ComicGeek wrote: »

No, it's a VAT issue, unless you're accusing the developers of VAT fraud?

They told OP that prices were inclusive of VAT, i.e. that the price quoted was all that he would have to pay, then then invoice with VAT added on top of that price.

Bait and switch.

VAT is in fact irrelevant to OP who simply should insist on paying what was agreed. Of course the issue is that it wasn't in writing...

martinsurrey

Miss_Samantha wrote: »

Bait and switch..

there is no switch, while I agree its shady, its not a bait and switch.

the goods remain the same, the price is increased, that's NOT bait and switch.

and OP will find that the contract isn't yet formed, so the developer could claim the previous conversation was an invitation to treat and as such not binding on either party.