Builder not VAT registered

oxfordmark

Hey

We had a builder out a few weeks ago who is not VAT registered. From a customers point of view, is there anything dodgy about this?

I was told payments would be in cash and all payments signed for.

Just wanted to check it is above board and ok to deal this way.

Cheers

Dean000000

I just googled this, and the first 4 hits were from other threads on this website of people asking the same question.

If you are in a rush, try reading those till completion, if not, just wait for someone else to post the same response from one of those.

Hope you find this helpful

neilmcl

oxfordmark wrote: »

Hey

We had a builder out a few weeks ago who is not VAT registered. From a customers point of view, is there anything dodgy about this?

I was told payments would be in cash and all payments signed for.

Just wanted to check it is above board and ok to deal this way.

Cheers

Not every business has to be registered for VAT, it's possible that his turnover isn't high enough, although I'd question his business model if he can't turnover £85K as a builder

comeandgo

It make no difference, you may find his hourly rate is cheaper ie person who is vat registered will have hourly rate of £30 plus vat of £6 while your builder can charge just the £30.

lewisa

oxfordmark wrote: »

Hey

We had a builder out a few weeks ago who is not VAT registered. From a customers point of view, is there anything dodgy about this?

I was told payments would be in cash and all payments signed for.

Just wanted to check it is above board and ok to deal this way.

Cheers

If this is for a small jobs type builder, I wouldn't worry.

If it's for someone who builds extensions or loft conversions then you should run a mile.

comeandgo

neilmcl wrote: »

Not every business has to be registered for VAT, it's possible that his turnover isn't high enough, although I'd question his business model if he can't turnover £85K as a builder

I know many tradesmen who are not vat registered. If they are nearing the threshold they ask consumer to pay for any materials. Not being vat registered does not mean they are inferior workmen.

pelirocco

neilmcl wrote: »

Not every business has to be registered for VAT, it's possible that his turnover isn't high enough, although I'd question his business model if he can't turnover £85K as a builder

Unless he is asking customers tto pay for the materials at source , £85k for a years labour is pretty good
Tbh I think if I was a one band band this is the route I would go down

neilmcl

comeandgo wrote: »

I know many tradesmen who are not vat registered. If they are nearing the threshold they ask consumer to pay for any materials. Not being vat registered does not mean they are inferior workmen.

I didn't imply otherwise.

oxfordmark

Hey

Cheers for the replies.

Doozergirl

oxfordmark wrote: »

Hey

We had a builder out a few weeks ago who is not VAT registered. From a customers point of view, is there anything dodgy about this?

I was told payments would be in cash and all payments signed for.

Just wanted to check it is above board and ok to deal this way.

Cheers

Not being VAT registered does not exclude the builder from giving invoices and accepting payments into their bank account.

Payment into their bank account is at least traceable and provable by you.

No invoice and payment in cash - you know you're buying into someone that isn't going to declare that income to HMRC for any purpose, let alone VAT.

Doozergirl

comeandgo wrote: »

I know many tradesmen who are not vat registered. If they are nearing the threshold they ask consumer to pay for any materials. Not being vat registered does not mean they are inferior workmen.

If they are nearing the theshold, that presents an issue to the consumer, though. The consumer is paying the VAT on materials regardless of how it is invoiced.

a) how do you know that they're nearing the threshold and not just running a business purely to avoid paying VAT? And if they're willing to cut corners there, where else are they prepared to do the same?
b) If the consumer buys the materials then there are questions when things go wrong because the contract becomes for labour only. It makes you responsible for the quality of materials even if the builder picked and chose them, and therefore responsible for any labour to rectify issues with them. Under a supply and fit contract, the builder is responsible for everything.