Can a company ask for VAT payments retrospectively?

Bookowl

Hi
Hope you can help with my query.

I set up an account with a taxi company for taxis to work , due to having a disability.
The taxi company now have said HMRC has advised them they should have been charging customers VAT on individual journeys. This dates back from 2017 until ongoing.
I didn’t think it was possible that a company could retrospectively ask for VAT back on goods. I thought it should be the company footing this bill?

If anyone could provide any advise.

Thanks

prowla

Is it services, not goods?

Certainly on a B2B basis it is possible to retrospectively charge VAT; invoices typically say "E&OE" ("errors & ommissions excepted"), so corrections can be made.

However, I'm not sure how it applies to retail.

I would guess that the company presented a retail price and never said inc/ex VAT and so the price you purchased at should be taken as final.

However, that's just opinion, hope it works out!

Bookowl

I think it would be counted as services. I set up an personal account to use taxis to work.
I will be fighting this case, if it comes to it.
Surely, if the company didn’t know or apply the rules or regulations properly. It can’t be left to the individual to pay?!

If anyone has ever come across a similar scenario where a company has asked for a vat payment retrospectively.
any advice appreciated

user1977

No, as far as consumers are concerned they're just paying the gross price - it's the supplier who needs to worry about whether that covers any VAT content. You don't need to pay extra for any past journeys.

Aylesbury_Duck

I agree with the advice given.  You'll have to consider whether not paying the amount in question (which I'm guessing is substantial) is likely to see your account closed and your custom barred.   Can you get an alternative company lined up ready?

Bookowl

Aylesbury_Duck said:

I agree with the advice given.  You'll have to consider whether not paying the amount in question (which I'm guessing is substantial) is likely to see your account closed and your custom barred.   Can you get an alternative company lined up ready?

I last used the taxi company in 2019. So I’ve closed my account already.

Bookowl

user1977 said:

No, as far as consumers are concerned they're just paying the gross price - it's the supplier who needs to worry about whether that covers any VAT content. You don't need to pay extra for any past journeys.

The taxi company are saying that HMRC deemed that customers should have been charged 20% vat on individual journeys. The company has passed this onto the customer. It seems 

Olinda99

all prices to consumers must be quoted including vat

https://www.gov.uk/marketing-advertising-law/describing-your-product

Bookowl

*seems to only apply to those who set up personal or business accounts.

Ergates

Bookowl said:

*seems to only apply to those who set up personal or business accounts.

Wouldn't that be all accounts?

Bookowl

Ergates said:

Bookowl said:

*seems to only apply to those who set up personal or business accounts.

Wouldn't that be all accounts?

Why didn’t they just decide to charge all customers  who used taxis from 2017-2022, why single out those with accounts?

i don’t think it’s fair because they didn’t have their affairs in order or weren’t aware of the rules. It shouldn’t be passed to the customer.

To use the analogy of buying a sofa, for example, and 5 years later the company get in touch to say, we forgot to charge you to VAT!?. That’s on the company to sort out surely.