Issue with Vat added at the end of a job

IndigoPie

Hi there, ( I'm not sure if this is the correct place - but seems like it!)

I'm requesting some advice or similar for a misleading quote/invoice I have received.

I'm having some work done on the house. I got a quote - The quote said 'ex.vat' in the price with no prices for VAT and no VAT number added on the quote. So assumed the trades company was not VAT registered. There's been no communication in emails to indicate that VAT would be due, so I accept the quote in good faith it's the price I will pay.

I commence the project; the trades company raises deposit invoice. Again this says 'ex.VAT' in the price and no VAT number on the invoice - supports the understanding that supplier isn't registered for VAT so therefore won't charge it.

Work is finished, final invoice comes in and it has VAT on the balance, with VAT number on the invoice - therefore final amount to pay is 20% more than budgeted!

I made an assumption the trades company has in the meantime registered for VAT, however, they provided details and they were registered nearly two years ago ( way before I contacted them ).

So, the issue I have, is I feel like I've been misled. I'm not a business, so a consumer so would expect that any quotes or certainly invoices SHOULD have VAT price included and VAT reg. Vat no. is surely a legal requirement on invoices?

When I challenged them on the deposit - they said that the deposit did actually include the VAT ( However it said ex.VAT and no VAT number...) - so backtracking on what I received and paid for/

I realise now that I should have got in an email clarification on whether VAT was charged. I don't think I should have to chase to see if VAT will be included, especially after the 'ex.VAT' deposit invoice was raised.

So any advice on what to do?

Pay the original price only and challenge it - or admit defeat and pay the whole price?

Many thanks!

ToxicWomble

Why did you not ask them rather than making assumptions

peter_the_piper

The fact that they bothered to put Ex-Vat on the quote would have led me to assume vat will be added on the final invoice. So my advice is pay.

Aylesbury_Duck

IndigoPie wrote: »

Hi there, ( I'm not sure if this is the correct place - but seems like it!)

I'm requesting some advice or similar for a misleading quote/invoice I have received.

I'm having some work done on the house. I got a quote - The quote said 'ex.vat' in the price with no prices for VAT and no VAT number added on the quote. So assumed the trades company was not VAT registered. There's been no communication in emails to indicate that VAT would be due, so I accept the quote in good faith it's the price I will pay.

I commence the project; the trades company raises deposit invoice. Again this says 'ex.VAT' in the price and no VAT number on the invoice - supports the understanding that supplier isn't registered for VAT so therefore won't charge it.

Work is finished, final invoice comes in and it has VAT on the balance, with VAT number on the invoice - therefore final amount to pay is 20% more than budgeted!

I made an assumption the trades company has in the meantime registered for VAT, however, they provided details and they were registered nearly two years ago ( way before I contacted them ).

So, the issue I have, is I feel like I've been misled. I'm not a business, so a consumer so would expect that any quotes or certainly invoices SHOULD have VAT price included and VAT reg. Vat no. is surely a legal requirement on invoices?

When I challenged them on the deposit - they said that the deposit did actually include the VAT ( However it said ex.VAT and no VAT number...) - so backtracking on what I received and paid for/

I realise now that I should have got in an email clarification on whether VAT was charged. I don't think I should have to chase to see if VAT will be included, especially after the 'ex.VAT' deposit invoice was raised.

So any advice on what to do?

Pay the original price only and challenge it - or admit defeat and pay the whole price?

Many thanks!

I think you owe the amount plus VAT. How much are we talking here? If it's a sizeable sum, it was naive to make an assumption that hundreds or perhaps thousands wouldn't be payable. I'm afraid I'm sceptical about your innocence. I may be wrong but I suspect you knew this might present an opportunity which is why you kept quiet at the stage when it would have been normal to question their billing. I agree with the poster who said that the fact they specifically said "ex.VAT" would have led me to assume it would be added. It looks as if they've been clumsy with how they haven't charged VAT on the deposit but have on the final sum but that doesn't mean you're exempt from paying the VAT.

I think you have two choices. Challenge the invoice and see what they say. Then, assuming they don't let you off the VAT sum, either pay in full or pay the sum without the extra and assume they'll sue you for the rest. I don't think you're on good ground.

stripeyfox

The time to check this is of course at the time the quote was issued. The fact that it stated "Excl VAT" would be a very large indicator that VAT will be added.

EDIT: I think the VAT on deposit thing is a red herring in any case. It's just a down payment and the trader probably only does the VAT return on the full final invoice

BoGoF

Another vote that them writing ex VAT meant it would be added on at the end. The time to ask questions was then.

IndigoPie

Thanks for the replies all. I will pay the VAT.

From the replies, I think partly the fault lies with me for making assumptions and not challenging the initial deposit invoice - As no VAT was charged and no VAT number presented on that invoice, I think it's fair to say that I assumed they were not VAT registered. ( they are after all a new company ) - So, therefore, didn't expect it in the final invoice.

However, I do think the company should have charged VAT on their deposit or at least placed a VAT number on it, which would have helped. ( I assumed it is a legal requirement to do this? ).

Anyway, it's not a big issue, as I mentioned the work they've done is great and I would certainly use them again - just good to get some additional thoughts on the matter. Many thanks!

davidmcn

IndigoPie wrote: »

However, I do think the company should have charged VAT on their deposit or at least placed a VAT number on it, which would have helped. ( I assumed it is a legal requirement to do this? ).

No, they need a VAT number on their VAT invoice, but a request for an advance payment doesn't incur VAT so no need to stick their number on it. I don't think there's anything unusual or underhand going on here. If somebody isn't VAT registered then I wouldn't expect them to mention VAT at all - "ex VAT" means they'll be adding VAT.

DoaM

I'm sure Devil Woman will be along shortly to confirm, but ... does the business not need to confirm the VAT rate? (i.e. 20% or as applicable at the time of invoice payment).

stripeyfox

DoaM wrote: »

I'm sure Devil Woman will be along shortly to confirm, but ... does the business not need to confirm the VAT rate? (i.e. 20% or as applicable at the time of invoice payment).

I think the invoice should/will itemise the VAT and rate, but the issue here is with the quote, not the invoice. On a quote, I'm sure "ex VAT" or "plus VAT" is sufficient since the prevailing rate could change between quote and invoice date?

stragglebod

stripeyfox wrote: »

I think the VAT on deposit thing is a red herring in any case. It's just a down payment and the trader probably only does the VAT return on the full final invoice

Then they're going to be in trouble with HMRC, as a tax point for VAT is created on a part payment of trade work.

Any price indication for a consumer must include VAT.

http://www.legislation.gov.uk/uksi/2008/1277/regulation/6/made

Since he didn't you have no obligation to pay anything more than the figure that appeared on his quote. Of course, he'll still have to account for VAT calculated on what he actually received; that's his problem.