Can a company ask for VAT payments retrospectively?

biscan25

I'd just be straight with them and say that the believe the amount you paid reflected the entire cost of the service and you have no intention of paying more.

This is obviously wholly untrue "we are legally obliged to collect historic VAT due to them on their behalf." You don't owe HMRC anything.

Knowingly making statements like this is in violation of The Consumer Protection from Unfair Trading Regulations 2008 and could be considered an offense. 

CKhalvashi

Jenni_D said:

Does it go on to explain what the VAT rate is, or state that VAT will be applied at the prevailing rate?

For a consumer contract then the total price must be clearly stated, or explained how it is derived. Any ambiguity in the contract must favour the party which did not draft the terms (Contra Proferentem), so if the term is unclear then the taxi is up the proverbial creek.

I agree that the OP needs to carefully read the T&Cs of the original contract.

I haven't been in the trade for quite a few years, records from then (other than historic tax records from 2015/16) have been destroyed/went with the company when it was sold.

I believe 'prevailing rate, which can be checked with HMRC' or wording to that effect was in place.

user1977 said:

CKhalvashi said:

Jenni_D said:

The taxi company can say what they like - and they probably would, as they owe HMRC; you don't have to pay them anything.  

For the record, ours stated (even for consumer contracts) that VAT will be added to metered/quoted fares and can be billed back 6 years in the case of admin error.

I very much doubt that would be enforceable against consumers. And from the OP it sounds like even the taxi company weren't aware they ought to have been adding VAT, so I doubt they would have been telling customers that VAT was going to be added.

The problem I take with that statement is that if something goes in the favour of the consumer, the company should not be reimbursed. If something goes against the consumer, the company must pay.

Mistakes happen, although admittedly less so than when we were working with paper and radios (which was upgraded to a contract spreadsheet and then a proper dispatch system where for account work the only button that needs to be pressed once a month is 'print'.)

I do agree that if there is nothing in the contract this is much more likely to go in OP's favour, however.

Most taxi companies are small businesses and vital to a portion of vulnerable residents in a local area. Yes, they should have sought advice but an error like this over several years can easily put a small business out of business.

For larger companies I am, however, much less sympathetic.

user1977

CKhalvashi said:

Most taxi companies are small businesses and vital to a portion of vulnerable residents in a local area. Yes, they should have sought advice but an error like this over several years can easily put a small business out of business.

Yes, which is why they should try not to do it in the first place, rather than expect their vulnerable customers to dig them out of a hole.