VAT Charged by Caterers

Altior

It could be treated as a disbursement (if the criteria has been met), doesn't mean it should be. As the OP has apparently had sight of a quote, it is at least a possibility and worth asking. If the caterers are a 'very large company', this kind of outsourcing will be commonplace. 

EJHome

Thanks everyone. It seems complicated. I'll ask the company and except whatever answer I'm given. 

Manxman_in_exile

EJHome said:

Hi All, I think this is far more complicated than I first realised. 
I'll try and provide some figures for clarity. Firstly I would assume they are Vat registered, as they are a large company and definitely intending to charge us Vat. 

Our Quote looks like follows.
TOTAL COSTS: Item Cost Food £ 2,761.00
Hire & Equipment £ 1,250.00
 Staff £ 1,925.00
Rubbish Removal £ 175.00
 Damage deposit £ 60.00
Street Food £ 250.00
TOTAL £ 6,421.00
VAT £ 1,284.20
TOTAL INC VAT £ 7,705.20

The Hire & Equipment line £1250 is a cost being paid direct to another company for glassware, crockery ect. I have seen this itemised quote which includes VAT in the £1250 figure. Our Caterer have clearly included this whole figure in their total and then added 20% vat. We are effectively paying vat on this line item twice is that correct? 

This might look like penny pinching but the whole thing is so expensive any saving helps. 

If you've agreed to pay £7705.20 then that's what you have to pay.

If you had any queries about how that amount was made up you should have resolved all that before agreeing to pay it.

Hire of glasses etc is not a disbursement.

EJHome

Manxman_in_exile said:

EJHome said:

Hi All, I think this is far more complicated than I first realised. 
I'll try and provide some figures for clarity. Firstly I would assume they are Vat registered, as they are a large company and definitely intending to charge us Vat. 

Our Quote looks like follows.
TOTAL COSTS: Item Cost Food £ 2,761.00
Hire & Equipment £ 1,250.00
 Staff £ 1,925.00
Rubbish Removal £ 175.00
 Damage deposit £ 60.00
Street Food £ 250.00
TOTAL £ 6,421.00
VAT £ 1,284.20
TOTAL INC VAT £ 7,705.20

The Hire & Equipment line £1250 is a cost being paid direct to another company for glassware, crockery ect. I have seen this itemised quote which includes VAT in the £1250 figure. Our Caterer have clearly included this whole figure in their total and then added 20% vat. We are effectively paying vat on this line item twice is that correct? 

This might look like penny pinching but the whole thing is so expensive any saving helps. 

If you've agreed to pay £7705.20 then that's what you have to pay.

If you had any queries about how that amount was made up you should have resolved all that before agreeing to pay it.

Hire of glasses etc is not a disbursement.

Thanks for your thought about the disbursement or lack of. 

We haven't agreed to pay a set figure at all as our original quote was subject to change and it has changed a lot since we started often without clear communication which is why I am now questioning everything. 

the_lunatic_is_in_my_head

EJHome said:

Hi All, I think this is far more complicated than I first realised. 
I'll try and provide some figures for clarity. Firstly I would assume they are Vat registered, as they are a large company and definitely intending to charge us Vat. 

Our Quote looks like follows.
TOTAL COSTS: Item Cost Food £ 2,761.00
Hire & Equipment £ 1,250.00
 Staff £ 1,925.00
Rubbish Removal £ 175.00
 Damage deposit £ 60.00
Street Food £ 250.00
TOTAL £ 6,421.00
VAT £ 1,284.20
TOTAL INC VAT £ 7,705.20

The Hire & Equipment line £1250 is a cost being paid direct to another company for glassware, crockery ect. I have seen this itemised quote which includes VAT in the £1250 figure. Our Caterer have clearly included this whole figure in their total and then added 20% vat. We are effectively paying vat on this line item twice is that correct? 

This might look like penny pinching but the whole thing is so expensive any saving helps. 

Hi OP, it's either 3 things,

1) The company have made a mistake and the line Hire & Equipment should be £1041.67 (and the £208.33 would be included in the VAT line at the bottom)

2) The company are making £208.33 profit on the arrangement (which is fine unless there was a specific agreement you would pay £1250 or actual cost for that element of the bill). 

All you can do is ask them really and see what they say. 

Option 3 is offer to pay the Hire & Equipment directly to the other company but if something went wrong you may find you have to deal with any problems. Currently if you pay the company organising everything and the equipment is incorrect, doesn't turn up, etc they have to sort that out for you, if you paid direct then you might have a headache sorting out problems so it's not an idea I would suggest IMHO.  

DullGreyGuy

the_lunatic_is_in_my_head said:
Option 3 is offer to pay the Hire & Equipment directly to the other company but if something went wrong you may find you have to deal with any problems. Currently if you pay the company organising everything and the equipment is incorrect, doesn't turn up, etc they have to sort that out for you, if you paid direct then you might have a headache sorting out problems so it's not an idea I would suggest IMHO.  

The event has already happened, from what I read. As such its somewhat betting on a race that has already run... the £208 may have been a reasonable premium to pay for it to be their problem if anything had gone wrong but with nothing having gone wrong now isnt the time to say you dont want to pay it... like asking for your annual insurance premiums to be refunded in full because you didnt have a claim this year.

Obviously the OP can ask but feels late to be asking

tightauldgit

EJHome said:

Manxman_in_exile said:

EJHome said:

Hi All, I think this is far more complicated than I first realised. 
I'll try and provide some figures for clarity. Firstly I would assume they are Vat registered, as they are a large company and definitely intending to charge us Vat. 

Our Quote looks like follows.
TOTAL COSTS: Item Cost Food £ 2,761.00
Hire & Equipment £ 1,250.00
 Staff £ 1,925.00
Rubbish Removal £ 175.00
 Damage deposit £ 60.00
Street Food £ 250.00
TOTAL £ 6,421.00
VAT £ 1,284.20
TOTAL INC VAT £ 7,705.20

The Hire & Equipment line £1250 is a cost being paid direct to another company for glassware, crockery ect. I have seen this itemised quote which includes VAT in the £1250 figure. Our Caterer have clearly included this whole figure in their total and then added 20% vat. We are effectively paying vat on this line item twice is that correct? 

This might look like penny pinching but the whole thing is so expensive any saving helps. 

If you've agreed to pay £7705.20 then that's what you have to pay.

If you had any queries about how that amount was made up you should have resolved all that before agreeing to pay it.

Hire of glasses etc is not a disbursement.

Thanks for your thought about the disbursement or lack of. 

We haven't agreed to pay a set figure at all as our original quote was subject to change and it has changed a lot since we started often without clear communication which is why I am now questioning everything. 

What have you actually agreed to then? If you've signed up to give them carte blanche to just charge whatever they like then I dont think you have much comeback. 

the_lunatic_is_in_my_head

tightauldgit said:

EJHome said:

Manxman_in_exile said:

EJHome said:

Hi All, I think this is far more complicated than I first realised. 
I'll try and provide some figures for clarity. Firstly I would assume they are Vat registered, as they are a large company and definitely intending to charge us Vat. 

Our Quote looks like follows.
TOTAL COSTS: Item Cost Food £ 2,761.00
Hire & Equipment £ 1,250.00
 Staff £ 1,925.00
Rubbish Removal £ 175.00
 Damage deposit £ 60.00
Street Food £ 250.00
TOTAL £ 6,421.00
VAT £ 1,284.20
TOTAL INC VAT £ 7,705.20

The Hire & Equipment line £1250 is a cost being paid direct to another company for glassware, crockery ect. I have seen this itemised quote which includes VAT in the £1250 figure. Our Caterer have clearly included this whole figure in their total and then added 20% vat. We are effectively paying vat on this line item twice is that correct? 

This might look like penny pinching but the whole thing is so expensive any saving helps. 

If you've agreed to pay £7705.20 then that's what you have to pay.

If you had any queries about how that amount was made up you should have resolved all that before agreeing to pay it.

Hire of glasses etc is not a disbursement.

Thanks for your thought about the disbursement or lack of. 

We haven't agreed to pay a set figure at all as our original quote was subject to change and it has changed a lot since we started often without clear communication which is why I am now questioning everything. 

What have you actually agreed to then? If you've signed up to give them carte blanche to just charge whatever they like then I dont think you have much comeback. 

When dealing with a consumer the trader should inform the consumer of the price, or how it is to be calculated, presumably to specifically avoid “ carte blanche to just charge whatever they like”

screech_78

I don’t get this. Surely the company can charge whatever they want, the cost price is irrelevant. They’re a business. 

We purchase sofas for £400 and sell them for £1200 plus. It’s not against the law. 

Of course, if they’ve changed the price from the one quoted, that’s different. 

the_lunatic_is_in_my_head

screech_78 said:

I don’t get this. Surely the company can charge whatever they want, the cost price is irrelevant. They’re a business. 

We purchase sofas for £400 and sell them for £1200 plus. It’s not against the law. 

Of course, if they’ve changed the price from the one quoted, that’s different. 

But presumably you don't show the customer the £400 invoice.

Profit is an obvious element of business but so is customer service, OP will hopefully not need the company again but if friends ask for a recommendation any ill feeling may affect whether that recommendation is given or not, it's human nature not to wish to feel like you've "over paid", for want of a better word, and the situation could have been avoided if the company hadn't let the OP see their supplier's invoice. 

As someone working in customer service hopefully it would be something you do "get"