Invoice and VAT query for works

Section62

mutley74 said:

Sandtree said:

comeandgo said:

Why are you really interested if they are VAT registered or not? It costs £1,200 wether that's £1,200 to them or £1,000 to them and then £200 off to HMRC

My joiner, pre vat registration was £30 an hour now as he is vat registered he costs £36 per hour.  If I was a vat registered business it would make no difference as I’d claim the vat back in my vat return but I’m a little old lady so have to pay.

Then it begs the question why he wasn't charging £36 an hour beforehand if you and other customers are willing to pay that rate. 

For the majority of businesses crossing the threshold of VAT rarely enables them to increase their prices 20% and retain the same level of customers. 

mutley74 said:

Sandtree said:

Only a VAT Invoice needs to have the VAT details and only when both parties are VAT registered can a VAT invoice be demanded... there is no obligation to provide one in any other circumstances though clearly most do. 

Why are you really interested if they are VAT registered or not? It costs £1,200 wether that's £1,200 to them or £1,000 to them and then £200 off to HMRC

because i have had trader charge me VAT before, and when I did some digging realised they were not even VAT registered. 
So a genuine company/trader should not charge extra for VAT. 

Were you happy with the price?
I am certainly not saying that companies should falsely state that they are charging VAT when they aren't but I struggle to understand why someone would think £1,200 is too much but £1,000 + £200 VAT (aka £1,200) is acceptable if the payer is not VAT registered... do you consider the VAT payment to be some form of charity payment or such?

I have no issue to pay VAT, if the charging trading is legitimately registered to charge VAT.  What annoys me the number of smaller traders who "add VAT " on their bills but not even VAT registered.  Charging VAT when one is not VAT registered is fraud. 

Sometimes there can be confusion where an unregistered trader shows 'VAT' on materials they have purchased as a separate line on their non-VAT invoice.  The industry generally works on ex-VAT prices, but an unregistered trader will effectively be paying 'your' VAT on the materials costs for you.

The key is good communication (from both sides) so there's clarity on what all the costs and charges are.

comeandgo

Sandtree said:

comeandgo said:

Why are you really interested if they are VAT registered or not? It costs £1,200 wether that's £1,200 to them or £1,000 to them and then £200 off to HMRC

My joiner, pre vat registration was £30 an hour now as he is vat registered he costs £36 per hour.  If I was a vat registered business it would make no difference as I’d claim the vat back in my vat return but I’m a little old lady so have to pay.

Then it begs the question why he wasn't charging £36 an hour beforehand if you and other customers are willing to pay that rate. 

Because he is a very honest person, and excellent at his work.  I don’t think he lost any of his old customers.

Sandtree

comeandgo said:

Sandtree said:

comeandgo said:

Why are you really interested if they are VAT registered or not? It costs £1,200 wether that's £1,200 to them or £1,000 to them and then £200 off to HMRC

My joiner, pre vat registration was £30 an hour now as he is vat registered he costs £36 per hour.  If I was a vat registered business it would make no difference as I’d claim the vat back in my vat return but I’m a little old lady so have to pay.

Then it begs the question why he wasn't charging £36 an hour beforehand if you and other customers are willing to pay that rate. 

Because he is a very honest person, and excellent at his work.  I don’t think he lost any of his old customers.

You miss the point...

What is the difference to you @comeandgo if the price is £20, £40 or £200 per hour? Most basically its £20 or £180 per hour. 

There are many reasons why one company has more overheads to cover and so charge more... VAT, Apprentice Levy, head office in Mayfair, large debts on high interest to name but a few... which of these makes you want to pay more for the identical work by the identical person?

Most large enough to have to have to charge VAT can argue their size brings some benefit and so the cost of VAT can be at least shared but it takes a special relationship for people to simply accept a 20% price increase because their supplier has become more successful. Next year will be the 0.5% apprentice levy increase, the year after the BMW 5% price increase... all the time the same person, the same job.

Sandtree

mutley74 said:

Sandtree said:

comeandgo said:

Why are you really interested if they are VAT registered or not? It costs £1,200 wether that's £1,200 to them or £1,000 to them and then £200 off to HMRC

My joiner, pre vat registration was £30 an hour now as he is vat registered he costs £36 per hour.  If I was a vat registered business it would make no difference as I’d claim the vat back in my vat return but I’m a little old lady so have to pay.

Then it begs the question why he wasn't charging £36 an hour beforehand if you and other customers are willing to pay that rate. 

For the majority of businesses crossing the threshold of VAT rarely enables them to increase their prices 20% and retain the same level of customers. 

mutley74 said:

Sandtree said:

Only a VAT Invoice needs to have the VAT details and only when both parties are VAT registered can a VAT invoice be demanded... there is no obligation to provide one in any other circumstances though clearly most do. 

Why are you really interested if they are VAT registered or not? It costs £1,200 wether that's £1,200 to them or £1,000 to them and then £200 off to HMRC

because i have had trader charge me VAT before, and when I did some digging realised they were not even VAT registered. 
So a genuine company/trader should not charge extra for VAT. 

Were you happy with the price?
I am certainly not saying that companies should falsely state that they are charging VAT when they aren't but I struggle to understand why someone would think £1,200 is too much but £1,000 + £200 VAT (aka £1,200) is acceptable if the payer is not VAT registered... do you consider the VAT payment to be some form of charity payment or such?

I have no issue to pay VAT, if the charging trading is legitimately registered to charge VAT.  What annoys me the number of smaller traders who "add VAT " on their bills but not even VAT registered.  Charging VAT when one is not VAT registered is fraud. 

But are you "paying VAT"? "Paying the Apprentice Levy"? Paying the BMW Premium?

Surely the price is the price irrespective if there is VAT, Mayfair offices, loan sharks etc to be paid? Or do you feel happier paying £1,200 for a job when £200 is going to HMRC than £1,100 when all is going to the trader? 

comeandgo

Sandtree said:

comeandgo said:

Sandtree said:

comeandgo said:

Why are you really interested if they are VAT registered or not? It costs £1,200 wether that's £1,200 to them or £1,000 to them and then £200 off to HMRC

My joiner, pre vat registration was £30 an hour now as he is vat registered he costs £36 per hour.  If I was a vat registered business it would make no difference as I’d claim the vat back in my vat return but I’m a little old lady so have to pay.

Then it begs the question why he wasn't charging £36 an hour beforehand if you and other customers are willing to pay that rate. 

Because he is a very honest person, and excellent at his work.  I don’t think he lost any of his old customers.

You miss the point...

What is the difference to you @comeandgo if the price is £20, £40 or £200 per hour? Most basically its £20 or £180 per hour. 

There are many reasons why one company has more overheads to cover and so charge more... VAT, Apprentice Levy, head office in Mayfair, large debts on high interest to name but a few... which of these makes you want to pay more for the identical work by the identical person?

Most large enough to have to have to charge VAT can argue their size brings some benefit and so the cost of VAT can be at least shared but it takes a special relationship for people to simply accept a 20% price increase because their supplier has become more successful. Next year will be the 0.5% apprentice levy increase, the year after the BMW 5% price increase... all the time the same person, the same job.

I agree with you in I totally miss your point.  I want a particular joiner and I will pay the extra as I know he is good, and I know he will never be in the league of paying citb levy or other government levies.  He is not large enough to be vat registered, he chooses to be.

FaceHead

Quote: This is an offer to provide a good or service at a price. If accepted it is binding on that provider. This is what you've received so far. 
Invoice: This is a request for payment for work that has been done. This is where the presentation of the right information for a VAT invoice is required, as it's an invoice. You don't have this yet, because you've not agreed to the work, not had the work done and not been invoiced for it yet. 
Purchase order: This is the acceptance of a quote, with the recipient of the good or service confirming they will pay the invoice once the work is done and the invoice provided. In the context of a home refurbishment, this could just be a text message or verbal agreement to the quote.

I struggle to see how someone can have run a business without understanding the difference between a quote, and invoice and a purchase order. The requirements to put addresses, VAT number etc. are the requirements of a VAT invoice, not that of quote. 

Grumpy_chap

Sandtree said:

Most large enough to have to have to charge VAT can argue their size brings some benefit 

Does not need to be large to be large enough to have to charge VAT.

Most competent and experienced tradespeople, especially if also providing materials, even the one-person business, will meet the VAT-registration threshold.

Any business with two people, for example tradesperson plus mate will meet the VAT-registration threshold on labour alone.

Any business that is not properly VAT-registered is likely not declaring all income in the manner that they ought.