Hiring a marquee - VAT and cancellation fee

newzealand123

Hi all,

When asking a marquee business (in the UK) whether they could give us a discount for their quote, they told us they weren't VAT registered yet, so could take the VAT off their quote. However, they said that if we did that, we'd have a 100% cancellation fee. Can anyone explain why this might be? I didn't think the two things (not paying VAT and the 100% cancellation fee) would go hand in hand. I feel this would leave us very unprotected. Does anyone have any thoughts?

Thanks!

JamoLew

Surely if they aren't VAT registered then it shouldn't be included in the quote to start with.
I would run a mile

peter_the_piper

As above, they are screwing their customers and the Vatman. Run and report to the HMRC. We write on invoices that we are not vat registered and that the price reflects this.

Hasbeen

JamoLew wrote: »

Surely if they aren't VAT registered then it shouldn't be included in the quote to start with.
I would run a mile

Op does not say VAT was included in quote.

Only that the current vat rate 20% would be discounted off.

Company does not need to be registered for VAT if earning less than £85000 per year ?

ToxicWomble

That’s not what the OP says ... clearly says “take the VAT off their quote”. NOT “take the equivalent amount to VAT off the quote”

sheramber

if there is VAT included in the quote then the VAT reg number should be shown on the invoice. Is it?

Annie35

Because that's the terms they're offering in exchange for a discount (just like a last minute hotel room is often cheap but non refundable). It's upto you if you want to accept or negotiate further.

Do agree thou the vat aspect whiffs a bit funny.

mattyprice4004

They offered you a deal - the two terms don't need to be linked; it's up to them what they offer.
Knocking off VAT as a discount is dodgy but far from unheard of in the business world - a lot of businesses offer a cash discount and don't pay the VAT. Dodgy, but the risk is down to them.

At the end of the day, businesses are constantly pushed by people asking for discounts here and there - either take it or leave it

SnowTiger

mattyprice4004 wrote: »

They offered you a deal - the two terms don't need to be linked; it's up to them what they offer.
Knocking off VAT as a discount is dodgy but far from unheard of in the business world - a lot of businesses offer a cash discount and don't pay the VAT. Dodgy, but the risk is down to them.

At the end of the day, businesses are constantly pushed by people asking for discounts here and there - either take it or leave it

I've seen other places do it. One of the TV shopping channels used to have VAT free weekends.

bathstore.com is currently running a "We'll Pay The VAT" promotion:

Offer equates to 20% discount on product list price.

It's probably simply sales patter used by the marquee company.

Numberphiles amongst you will be aware that reducing the price of something by 20% isn't (quite) the same as knocking the VAT off.

newzealand123

Hi all,

Thanks for the comments so far. The original quote did have VAT in, and when we asked for a discount/better price, the owner said they are currently going through the VAT registration process but that if we got our deposit in before they completed the registration, then we could save the VAT. It looks like a relatively young business, so I think they're under or just breaking the 85k threshold. I do think they're a legit company!

Aylesbury_Duck

SnowTiger wrote: »

I've seen other places do it. One of the TV shopping channels used to have VAT free weekends.

bathstore.com is currently running a "We'll Pay The VAT" promotion:



It's probably simply sales patter used by the marquee company.

Numberphiles amongst you will be aware that reducing the price of something by 20% isn't (quite) the same as knocking the VAT off.

Indeed. I worked at a retailer when the VAT rate was 17.5% and overseas customers could reclaim VAT. We'd regularly get complaints that the amount reclaimed was only 14.89% of the sale price, not the 17.5% they were adamant they were owed. In most cases they never got it, no matter how I tried to explain it.

Even now, when VAT is at the simpler-to-calculate 20%, trying to explain to some people why only 16.67% of the sale price is VAT is impossible. They refuse to believe it, even when shown how it's calculated.