Quote/Invoice confusion

JBean_2

We had a very bad experience with a contractor for work on a driveway. We tried to take it to small claims, but unfortunately didn't have enough evidence while he lied repeatedly, including producing two false quotes that he claimed to have given us but did not. In total, we ended up with five different documents from him and, for future learning, I'm trying to understand the difference in headings. The first 'quote' was headlined 'Quotation details'; the second was headlined 'Quotation/Invoice'; the final document we saw was headlined 'Contract Details'. The two false documents he produced for court were both headlined 'Quotation/Invoice'. On all five documents, there was a small print satement 'all above prices exclusive of VAT, all extras paid on completion'. So, my questions are: (1) Are the different headings on these documents standard? (2) How can we protect ourselves in future if told a quote is the final price but it continues to rise and the small print overrides the verbal guarantee? (3) Is it okay that none of his documents had a unique ref no? This allowed him to produce false 'quotes' but apart from this, how does a trader benefit from not having a unique reference number on their quotations and invoices? (4) Finally, are we entitled to a receipt for the money paid? Sorry for the long query but it was a very bad experience and I haven't been able to find answers elsewhere. Thanks for any guidance offered.

teneighty

If there is no contract or anything like that you need a letter of intent. The way I would do it is send a letter or email, anything in writing that you can keep a copy, with following wording.

Please proceed with works to resurface driveway (*) in accordance with your quotation dated 11th June 2017 in the sum of £1200.00 excl. VAT.

Maybe add following if timescale has been agreed...Works to commence on (insert date) and be completed by (insert date) as agreed.

(*) include any mention of specification or materials so if it is tarmac make a reference to the specification or details wherever that maybe. So for instance ..as detailed in specification dated 14th May 2017 or if contractor gave the specification ..... tarmac specification as detailed in your email of 14th May 2017.

You should also add any important instructions, so for instance....existing oak gate posts to be retained and protected throughout the works.

What you are trying to do is give a written instruction which ties in with the quotation by giving the date and amount and also ties in any specific details that you want to highlight to avoid any ambiguity or later misunderstanding. It is surprising how things start to get forgotten or people have different interpretations or recollections of what was discussed and agreed if there isn't a clear written record.

JBean_2

Thank you for replying. Not being used to dealing with traders, it seems like getting a quotation is not as simple as it sounds. Thanks again.

Annie1960

This is shocking.

There are indeed rules about VAT invoices, and you are correct to suppose they need to have a unique identification number. See HMRC website here:

https://www.gov.uk/invoicing-and-taking-payment-from-customers/invoices-what-they-must-include

Otherwise, as you say, anyone could invent an invoice after the event and put what they like on it.

When you say you tried to take it to the small claims court, what do you mean by this? Did you actually take it and get a hearing? Or were you put off by his paperwork?

If you have not taken it to court, then you should consider doing so, and submit the HMRC rules on numbering invoices as part of your evidence.

If you did actually take it to court and he won, then I don't know what the judge was thinking. Can you appeal it?

Do you have your own paperwork, emails or text messages showing his quotes or anything?

Another line to pursue is to check whether he is actually VAT registered. Do you have his registration number? It's easy to check here:

http://ec.europa.eu/taxation_customs/vies/

If he is not VAT registered, you could report him to HMRC:

https://www.gov.uk/report-vat-fraud

JBean_2

Annie
Thank you for your response and apologies for coming back so late; I had given up hope of anyone else responding and hadn't checked back in a while.

Yes, we did take it to Small Claims Court and not only did we lose our claim but he had made a counterclaim and was awarded it. It was very hard to stomach as he had lied conitinually to us at the time and his lies went to a whole new level in court, including producing the false invoices and waving one of them at me, saying 'you know I gave this to you', all the while saying that the bible was in front of him. It was quite a performance. We were just stunned by all the lies but unfortunately, it was his word against ours, we simply had no proof. The judge was very hostile to us from the start, I think because I had included so much documentation, which clearly irritated her. Also, he had a solicitor so it was me against an experienced solicitor; we didn't stand a chance. The judge simply took the view that he had been at the property and did a certain amount of work, rather than whether or not it was necessary. She had clearly not listened to a telephone call with him that I had recorded, which we believe strongly indicated at least two of the lies he was telling in court, including the claim to have given us additional invoices. So not only did he commit perjury, he was rewarded for it. He is VAT registered and his solicitor presented him as a professional businessman of 30 years' experience. Unfortunately, it wasn't until afterwards that I learned invoices should have a unique reference number and the judge didn't pick up on this either. There is no appeal over a small claims case, except if it is on a point of law.

To add insult to injury, we then had to remove a negative online review I had posted, because he threatened legal action for defamation. So, I'm trying to draft another review that we can prove as truth. I see that HMRC says invoices 'must' have a unique ref no, but I'm not sure if this means it's illegal not to include a number. I need to ensure that I can use that word in a review, so I'm now seeking legal advice, to keep ourselves right. The cost will be worth it to warn others about him.

I did try to find out if we can report him for not numbering invoices, but the HMRC doesn't say anything about this and I haven't been able to find out anything definitively online. Would you know if and how it can be reported to HMRC?

The other thing is that he refused to provide a receipt for the initial deposit we paid him at the time and we also haven't received a receipt for the additional money we had to pay because of the court decision. I would be very interested to know if these comply with HMRC requirements also. Would you know if we are entitled to a receipt? Again, I haven't been able to find out anything online.

It has been a very unpleasant and expensive lesson for us. He behaved so self-righteously in the court while lying continually under the judge's nose and was very quick to threaten us with legal action if we didn't remove our review. But hopefully, we will get some sense of justice in the end by being able to post an online review that exposes at least some of his practices.

Thanks very much again for the response and any further advice you can give would be greatly appreciated.

Annie1960

In your position, I would complain to HMRC as a first priority. Do you have copy of the invoice he used in court to show that it did not have a unique ref. no? This will be strong evidence that he is not complying with the VAT rules.

You could could also explain that he refused to provide a receipt. I'm not sure how getting a receipt that this stage would help you, but it may alert HMRC to the way he does business, and may prompt them to review his VAT affairs. This will cause him much more grief that any online review, unless his records are fully compliant (and it sounds as though they may not be). The link for reporting him is the same as the final link in post no. 4 above.

Try and keep your complaint short and to the point. Don't go into the court case, as they will not be interested in this. Just state that he refused to provide any receipts, and that he did not have any unique reference for the invoice he sent you, and that he appeared to engage in sharp practice by increasing the price in his original quote. The most important point to emphasise is the fact he did not have a unique reference for the invoice, and thus may be keeping more than one set of books.

Do you have records showing how much you paid him and by which method? If so, send HMRC this (for example, if you paid by bank transfer, you could tell them the bank details he provided, and get a print-out from your own account showing the payments. you made).

Regarding the negative review and defamation issue, you can get legal advice from a company called Law Express (on the telephone). They charge around £30 or so per call. Google them. Alternatively, if your home or car insurance has legal advice included, give them a ring. You could also ask them whether an invoice failing to have a unique reference is a point of law that could be used for an appeal.

Just out of interest, do tell us which site you put the online review on.

Unfortunately there is little or no regulation in the construction industry, and these people are able to thrive.

Normally a 'quote' is a fixed price, and an 'estimate' has more scope for variation. I'm not really sure how he managed to increase the price of his quote, unless he did extra work.

JBean_2

Hi Annie and thanks for replying.

We got legal advice not to write an online review (which was on Yelp, Google and a local web service) because the court decision went against us. Even though he perjured himself throughout the case, we just couldn't prove it so we have to let the review go. Unfortunately we didn't know about the invoices for the court case, which may have made a big difference. But even if we can prove it now, we've been advised it could still be seen as malicious. It baffles me how, if it's true, but we've decided to take the legal advice on it.

So, to answer the rest of your questions:

Re HMRC: Yes, this would not be our priority and would definitely be more effective than an online review in making him shape up his practices, but only if we can get definitive proof that his invoices do not comply. Despite hours on online searching and asking various professionals and bodies, I still cannot get clear information on this, which is very frustrating. The various documents he gave us are not consistent or clear in their headings. The original document was headlined 'Quotation Details' but the small print said it did not include extras, so I don't know how that sits with a quote being fixed. He managed to increase this quote by completely bamboozling us with regard to how far down he had to dig. He also, very cleverly, kept the quote so brief that he was able to then add costs that he had told us would be included but which he had not specifically listed on the quote, thus duplicating the costs. For example, he said he hadn't seen the gutters (the only two gutters in the driveway) and that he hadn't added some materials. I know this makes us look totally stupid and I did in fact tell him to leave when he said he had to increase the price, but my daddy, who is in his 80s and at high risk of falls, was very upset because, of course, the quote didn't increase until this man had begun the work and the driveway was a mess and hazardous to my daddy and I thought we should cut our losses and pay the extra rather than having to wait for goodness knows how long). So that was the first quote. The new quote he gave us for the 'extra' work was headlined 'Quotation/Invoice' (I don't know if this is allowed as I know now that there is a difference between a quote and invoice but, again, the small print on this document says extras may be added, so maybe this allows him to do this?). The two false documents he then later produced for court are also headlined 'Quotation/Invoice' and a final document sent to us requesting payment was headlined 'Contract Details' (this was the one the judge made her decision on). All of these documents had his VAT reg no, but no unique reference number. None had his address either (which I see is another requirement by HMRC for invoicing).

So, yes, while we would be keen to report him to HMRC, I need to first establish clearly that his invoices do not comply. From what I've read online, it even looks to me like businesses may not even actually have to issue invoices to ordinary people, just other VAT-registered business (as a new user, I'm not allowed to include a link but its on the HMRC website forward slash 'invoicing-and-taking-payment-from-customers/overview). To confuse things more, a solicitor told me that the invoices should have an unique number but an accountant told me it wasn't important and trading standards didn't know. And the judge certainly didn't pick up on it, so you can see why I'm confused?

Even if I can get definitive advice that the invoices are illegal, there seems to be no way to report to HMRC on this type of thing. I've checked out the link you sent in your last post, but it's for reporting fraud and I'm not sure if I can made the jump from dodgy invoices to fraud. Given the court decision, I'm worried we would be accused of being malicious. But if I can find another way to report it, I would. I've also read online that HMRC aren't even interested in this type of thing because it's too small-fry. So, all in all, it's a minefield for ordinary people, which works very well for dishonest businesses. On top of this, his solicitor accused us in court of trying to conspire with his client to commit fraud which was another blatant and very dangerous lie, but unfortunately, again, we could not prove it and the judge ruled in his favour, so I'm even worried that HMRC would take action against us because he has covered himself and we have no proof.

Finally, regarding our payments to him: We paid him £1,300 in cash at the time as a deposit, which he had admitted to me in a phone conversation that I taped, so that was on record. He said in the call that he had lodged it into his business account on a particular date. For court, he got a statement from his accountant that it had been lodged, but there was no date on the statement. In court I made the point that the statement from his account did not provide proof of his claim that the money had been lodged on the date he claimed and of course he would lodge the same amount of cash at a later date to cover himself. Because I couldn't prove his biggest lies, I was trying to show where his claims were dubious, but, again, the judge didn't seem interested. The second payment we made to him was by cheque, following the court decision. He consistently refused to provide a receipt for the first cash payment despite our requests for one and as the judge didn't think anything of this, we didn't see the point in asking for one for the second payment. You're right, they're of no help at this stage, but because his invoices might be illegal, I keep asking myself, why would he not give us a receipt, so I'm interested to know if his receipts comply with HMRC requirements as I would report these also if not. But, again, I can't get any information on whether he even has to give us a receipt. There seems to be thing called a VAT receipt, but it seems to be that it's also just for other businesses but I can't find anything on whether or not ordinary people are entitled to a receipt or a VAT receipt.

Yes, as you say, dishonest tradesmen thrive in this industry. We have found out the hard way just how easy it is for them to con honest people and not only get away with it but get the blessing of courts to keep doing what they're doing.

I'm still trying though to get clear information on the invoices as that's the only thing we can possibly do anything about. I plan to ask another accountant for an opinion, so here's hoping there's some justice to be had.

[FONT=&quot]Thank you very much for you time, Annie, I really appreciate it.[/FONT]

Doozergirl

There's a lot of detail here. It really is detail, though. In all honesty, those unique reference numbers could almost be the date written on it if they only write one invoice that day, which is common for small traders. I know that I can always locate the correct invoice by date. When I'm dealing with large companies, where I get more than one invoice in a day and they're producing thousands themselves then we're only going to be able to communicate with a unique number. The purpose is to be able to differentiate between invoices. The law does not deal with trivialities. I can see why it might be perecived as vexatious. "de minimis non curat lex" means that the law does not deal with trifling matters.

If you want to report him to HMRC, just do it. They'll inspect him if they're listening to you. You can tell them what you've paid but they'll look at his record keeping and returns in general. It's for them to find discrepancies, not them.

It is completely normal that 'extras' aren't included in a fixed price. Building work involves as much art as science. The quote should be detailed enough to avoid doubt as to what constitutes an extra. As teneighty says, it would best to detail what it is you're expecting yourself in writing, in order to receive that quote. You can operate your own paper trail.

My overwhelming feeling here is that you possibly failed because you seem to looking at the fine detail and not of the wider specifics of why this job went wrong or in what way you needed to claim money from this person in the first place. And provide evidence. What did you actually sue him for and what was his counterclaim for?

Furts

I will add a take to Doozergirl's reply. Purely based on intuition I would not be surprised if the driveway contractor was a travelling contractor. The two go together in life. The golden rule is to avoid engaging with such scenarios. Equally any court action against such folks is futile, which begs the question why was court action undertaken?

Another take is the contractor was an established local trader. But such folks laying driveways are generally not clued up with court procedures, witness letters from an accountant and so on. They also do not need this hassle, nor damage to their reputation.

So on the balance of probabilities this is likely to be a streetwise (dodgy) contractor, who knows his way around the legal system.

One cannot say the contractor was a criminal because the court did not bring charges. But my intuition is this is not a cowboy builder case, but a case of dealing with a criminal. If so, one has to be super sharp to counter such folks, and even sharper to win against them. Which comes back to my earlier comment. Why were legal costs incurred? Why did this go to court? Why was the case against the contractor so badly administered? There was only ever going to be a small chance of victory against such a person, but in reality any chances of redress were nil.

JBean_2

Doozergirl, thanks for responding. The HMRC guidelines say there must be a date and a unique reference number on invoices to other businesses. I'm just not sure if that applies to invoices for ordinary people. It was a solicitor who initially told me that there should be unique ref no on our invoices, although an accountant disagreed. From what I've read so far, a unique reference number is important so that HMRC can check there are no gaps in invoices. Even cancelled invoices must be included so that there are not gaps. I don't think this would be regarded as a triviality as without a unique ref number, a trader can potentially just write invoices, take cash and not declare them. This is exactly what our tradesman was going had planned to do. He was then able to present a different, totally dishonest, case by producing false invoices for court with additional information. Again, because there were no unique ref numbers, he was easily able to do this and we couldn't prove they were false and that he had never given them to us. He didn't produce them until six months later but he backdated them. If they had unique ref numbers he wouldn't have been able to do this as the dates and ref numbers would have been out of sequence. So, I can see why it is important.

You say that it is completely normal that 'extras' aren't included in a fixed price. Again, I keep getting different views on this, but most of what I've read online indicates that an estimate can be increased but a quote not, unless the extra cost is agreed with the customer.

Yes, while it is best for the customer to detail what is expected in writing, it is very difficult for ordinary people who are inexperienced in this type of work to know every detail of material and labour involved. A lot goes on verbal agreement and trust, which we've learned the hard way, is the friend of the dishonest tradesman. In future I would be getting a simple statement in writing that all material and labour is included in the quote.

Finally, yes, on reflection, I could have presented our case better. There's a lot of detail because there were in fact a lot of things that he did and because he had behaved so dishonestly. I was trying to detail the various aspects to demonstrate this as we had no concrete proof. There's always a better way to do things, on hindsight. We should have got a solicitor (although the cost of hiring one would have very much offset the relatively small amount we were suing for, approx £750). Although a solicitor is not required for a small claims court, if one side chooses to use one, the other side is at a distinct disadvantage. We were actually advised by trading standards not to get one, that judges in small claims cases can be annoyed by people using solicitors. In our experience, this was bad advice. However, our biggest obstacle overall was a man who was quite prepared to tell enless lies and perjure himself under oath, knowing we had no proof. It was also very damaging to us that the judge hadn't listened to a phone call I had recorded, which was quite long but did indicate what we felt were important contradictions in his various versions of events.

To answer your last question, we sued him for partial refund of the deposit paid because we found out he had duplicated costs, unreasonably inflated costs, and subcontracted unnecessary work (which we were to pay him directly for and he inflated the actual cost). He counterclaimed for labour, materials and subcontracted work he claimed to have carried out. The materials were essential materials which he did not specify on the first invoice but which he had said were included. He lied about the hours of work he had done (again we had no proof that he was off site much of the time).



So, having learned an expensive lesson about unscrupulous tradesmen and valuable knowledge to guard against it for the future, we're just focusing on trying to get clarification in whether his invoices are legally compliant. Easier said than done.



Thanks again.

comeandgo

There is no legal issue regarding his invoices. Nobody can be charged with not having invoices suitably numbered.