Insurance claim net of VAT?

[Deleted User]

Confused. Insurance offered me £1850 which I thought was a bit low....

So I got a quote for £2160.

Now they're saying sorry we're only paying £1800 now because thats what your quote was net of vat.

Hows that fair? Its still going to cost me £2160 to replace the goods!

bazzyb

What kind of insurance?
What kind of goods?
Are you making the claim as a VAT registered business?

[Deleted User]

Home buildings insurance.
It was quote to replace damaged wood flooring.
No not vat registered business.

Quentin

Insurers normally do this when paying the policyholder on receipt of a quote

Check with yours, but normally you provide them with a proper Vat receipt and they will reimburse you the vat you have paid as long as you cannot recover it yourself

[Deleted User]

Quentin wrote: »

Insurers normally do this when paying the policyholder on receipt of a quote

Check with yours, but normally you provide them with a proper Vat receipt and they will reimburse you the vat you have paid as long as you cannot recover it yourself

Hmmm seems a bit off. They pay me a cash settlement then I'm 20% down on what it costs me.

Quentin

As posted, you won't be down as long as you can provide the vat receipt

[Deleted User]

Could it be because that's the price the insurance company would expect to pay if they fixed it for you? I've seen that before, people want to use their preferred retailer or buy themselves but the insurance company only wants to pay what it would cost them to buy the item, which is going to be the ex-VAT price.

FlameCloud

[quote=[Deleted User];75421799]Hmmm seems a bit off. They pay me a cash settlement then I'm 20% down on what it costs me.[/QUOTE]

Yes, because of course the VAT aspect never magically disappears when paying cash in hand does it?

TrickyDicky101

DELETED USER wrote:

Could it be because that's the price the insurance company would expect to pay if they fixed it for you? I've seen that before, people want to use their preferred retailer or buy themselves but the insurance company only wants to pay what it would cost them to buy the item, which is going to be the ex-VAT price.

Insurance companies generally can pay lower prices than Joe Public because they are volume buyers with significant purchasing power (ie economies of scale).

Since insurance companies don't make taxable (VAT'able) supplies (insurance is VAT exempt but suffers IPT instead) they cannot recover VAT they have to pay and certainly do not pay ex-VAT prices.

OnanTheBarbarian

They will pay you the vat element of the cost once you are able to provide a vat receipt from the company you use to do the work.

The reason they won't pay vat now is due to the fact you could trouser the payment and never have the work done.

[Deleted User]

FlameCloud wrote: »

Yes, because of course the VAT aspect never magically disappears when paying cash in hand does it?

Who said anything about cash in hand?