Roofer Invoice Charging VAT but No VAT Number

MapleTrees

Yes, the trader became VAT registered after we had agreed his expressly non VAT quote for £850. He is therefore obliged to pay VAT now on his income - which would be £850. I don't think he can pass an additional £170 on to us after the fact to mitigate his new obligations, as it becomes a "misleading omission".

EDIT:  According to the Consumer Protection from Unfair Trading Regulations 2008, a tradesperson is not acting within the law if they add VAT in an invoice if it wasn’t also clear in the quote. To do so is a misleading omission 1.

grumbler

MapleTrees said:

Yes, the trader became VAT registered after we had agreed his expressly non VAT quote for £850. He is therefore obliged to pay VAT now on his income - which would be £850. I don't think he can pass an additional £170 on to us after the fact to mitigate his new obligations, as it becomes a "misleading omission".

In fact, VAT due on £850 income will be £855/6=£144.33

grumbler

Risteard said:

grumbler said:

Risteard said:

maisie_cat said:

As I understand it, if the work was completed prior to his registration there is no VAT due as the tax point is the earlier of completion and invoice date.
If the work is completed post registration but the quote was clearly excluding VAT then the VAT is payable

VAT liability will be at the prevailing rate at the date of invoice.

VAT liability is the liability of the tradesperson. Non-business customers don't care about VAT and don't need to care. What they care about is the total amount they were quoted originally and agreed to. If the liability arose after the quote, but before the invoice, it's not the customer's problem.

That has nothing to do with what I was saying. My point is that an invoice issued after the VAT registration date legally must include VAT.

Is this a fact? I'm no expert, but "You must use VAT invoices if you and your customer are VAT registered."
https://www.gov.uk/invoicing-and-taking-payment-from-customers/invoices-what-they-must-include

In this case the customer is obviously not a business, can't claim VAT, doesn't care about it and doesn't need an invoice stating VAT. The invoice can include VAT as a part of the total amount, but I don't think it must.

Section62

MapleTrees said:

Yes, the trader became VAT registered after we had agreed his expressly non VAT quote for £850. He is therefore obliged to pay VAT now on his income - which would be £850. I don't think he can pass an additional £170 on to us after the fact to mitigate his new obligations, as it becomes a "misleading omission".

EDIT:  According to the Consumer Protection from Unfair Trading Regulations 2008, a tradesperson is not acting within the law if they add VAT in an invoice if it wasn’t also clear in the quote. To do so is a misleading omission 1.

There's a danger of people who appear not to know how VAT works confusing you with the wrong information.

VAT isn't a tax on income.

VAT is a tax that has to be applied by VAT registered entities on the amount charged for goods and services etc at the point of invoicing.

The trader's income is not the same thing as the amounts they may invoice customers for.  Talking about income is misleading in this context.

If the amount to be charged for the job was £850 then his VAT inclusive invoice should now show the materials/service as £850 with a separate invoice line for £170 of VAT.  It sounds like that is what he has done.

If you and he agree the total amount you should pay is going to be £850 then he should cancel the invoice and reissue one showing goods/services of £708.33 and VAT of £141.67.

I wouldn't include the "misleading omission" stuff in your contact with the scaffolder at this point.

MapleTrees

Section62 said:

If the amount to be charged for the job was £850 then his VAT inclusive invoice should now show the materials/service as £850 with a separate invoice line for £170 of VAT.  It sounds like that is what he has done.

If you and he agree the total amount you should pay is going to be £850 then he should cancel the invoice and reissue one showing goods/services of £708.33 and VAT of £141.67.

I wouldn't include the "misleading omission" stuff in your contact with the scaffolder at this point.

Thank you. Yes, his new invoice has a separate line for the £170 VAT.

I'll start gently with the query and save the legal bit for use only if I have to.

Section62

grumbler said:

Risteard said:

grumbler said:

Risteard said:

maisie_cat said:

As I understand it, if the work was completed prior to his registration there is no VAT due as the tax point is the earlier of completion and invoice date.
If the work is completed post registration but the quote was clearly excluding VAT then the VAT is payable

VAT liability will be at the prevailing rate at the date of invoice.

VAT liability is the liability of the tradesperson. Non-business customers don't care about VAT and don't need to care. What they care about is the total amount they were quoted originally and agreed to. If the liability arose after the quote, but before the invoice, it's not the customer's problem.

That has nothing to do with what I was saying. My point is that an invoice issued after the VAT registration date legally must include VAT.

Is this a fact? I'm no expert, but "You must use VAT invoices if you and your customer are VAT registered."
https://www.gov.uk/invoicing-and-taking-payment-from-customers/invoices-what-they-must-include

In this case the customer is obviously not a business, can't claim VAT, doesn't care about it and doesn't need an invoice stating VAT. The invoice can include VAT as a part of the total amount, but I don't think it must.

Yes -

How to charge VAT

When you sell goods or services, you must do the following:

• work out the VAT-inclusive price using the correct VAT rate
• show the VAT information on your invoice - invoices must include your VAT number and display the VAT separately
• show the transaction in your VAT account - a summary of your VAT
• record the amount on your VAT return

MapleTrees

I'm thinking of sending this as my reply:

"Dear xxxxx,

Many thanks for the invoice.

Our original quotation states the total price as VAT n/a.

I understand that between the time you quoted and the time you commenced the job you’ve registered for VAT. I believe you mentioned your registration occurred last month.

I feel this will have given you ample time to notify us of the 20% price increase above the agreed figure. In doing so we would have had an opportunity to reject or accept the new quote depending on our budget. I’m concerned that we were not given that opportunity and we’ve received an invoice for a figure much higher than previously agreed.

My understanding is that VAT shouldn’t be added to an invoice if it wasn’t included on the agreed quote.

I do understand that simple oversights can occur and I think your invoice should now state services as £708.33 and VAT as £141.67.

Kind regards,  "

grumbler

Section62 said:

grumbler said:

Risteard said:

grumbler said:

Risteard said:

maisie_cat said:

As I understand it, if the work was completed prior to his registration there is no VAT due as the tax point is the earlier of completion and invoice date.
If the work is completed post registration but the quote was clearly excluding VAT then the VAT is payable

VAT liability will be at the prevailing rate at the date of invoice.

VAT liability is the liability of the tradesperson. Non-business customers don't care about VAT and don't need to care. What they care about is the total amount they were quoted originally and agreed to. If the liability arose after the quote, but before the invoice, it's not the customer's problem.

That has nothing to do with what I was saying. My point is that an invoice issued after the VAT registration date legally must include VAT.

Is this a fact? I'm no expert, but "You must use VAT invoices if you and your customer are VAT registered."
https://www.gov.uk/invoicing-and-taking-payment-from-customers/invoices-what-they-must-include

In this case the customer is obviously not a business, can't claim VAT, doesn't care about it and doesn't need an invoice stating VAT. The invoice can include VAT as a part of the total amount, but I don't think it must.

Yes -

Yes what? Are you saying that the information I quoted is incorrect? At least I provided a link. You didn't. 
Tesco "sell goods and services". Do they show VAT on all invoices/reciepts?

badmemory

Well Tescos used to but no longer do, however Home Bargains & Aldis still do as do Tescos Express.

Section62

grumbler said:

Section62 said:

grumbler said:

Risteard said:

grumbler said:

Risteard said:

maisie_cat said:

As I understand it, if the work was completed prior to his registration there is no VAT due as the tax point is the earlier of completion and invoice date.
If the work is completed post registration but the quote was clearly excluding VAT then the VAT is payable

VAT liability will be at the prevailing rate at the date of invoice.

VAT liability is the liability of the tradesperson. Non-business customers don't care about VAT and don't need to care. What they care about is the total amount they were quoted originally and agreed to. If the liability arose after the quote, but before the invoice, it's not the customer's problem.

That has nothing to do with what I was saying. My point is that an invoice issued after the VAT registration date legally must include VAT.

Is this a fact? I'm no expert, but "You must use VAT invoices if you and your customer are VAT registered."
https://www.gov.uk/invoicing-and-taking-payment-from-customers/invoices-what-they-must-include

In this case the customer is obviously not a business, can't claim VAT, doesn't care about it and doesn't need an invoice stating VAT. The invoice can include VAT as a part of the total amount, but I don't think it must.

Yes -

Yes what? Are you saying that the information I quoted is incorrect? At least I provided a link. You didn't. 
Tesco "sell goods and services". Do they show VAT on all invoices/reciepts?

Yes, the text I quoted can be found in the same place your link points to, the official government website.

Which confirms what Risteard posted is a fact.

If you are concerned that Tescos aren't complying with the VAT rules applicable to them then perhaps it would be better to take it up with Tescos? (Pay at pump receipts also do include a VAT line)  But Tesco receipts is a significant thread deviation from whether or not the OP's scaffolder is required to add VAT at the appropriate rate to the invoices they issue from the point they became VAT registered. (maybe has something to do with a receipt not being an 'invoice'?)