VAT - Can A Sole Trader Unregistered for VAT Charge VAT on invoices?

Grumpy_chap

You are focusing on the invoice, but have not answered the key question:

Was the agreed price £1,000 and then the sole-trader is seeking to claim VAT on top of that?
OR, was the agreed price £1,200, and you are being charged the agreed price?

A VAT-invoice is only required when a VAT-registered business is selling to another VAT-registered business.  As you are a consumer, it is only the total cost that you need to be concerned about.  It is for the trader to have their tax affairs in order.

On a detail, the charge of £500 "inc VAT" would not suggest a VAT charge of £100.
£500 inc VAT would be £416.67 plus £83.33 VAT making the total of £500.
The VAT rate of 20% is applied to the pre-VAT value.

prowla

LoveParasite said:

One invoice has for example

£1,000

VAT @ 2O%

£200

Total,

£1,200

The other invoice has a total amount of for example

£500

it states underneath this, "Inc VAT". I'd assume that this suggests a VAT charge/aknowledgement of £100

There is no VAT registration number on either invoice.  I'm aware that threshold can dictate registration but also that is can be applied for on a voluntary basis when under the threshold.

A company which is not VAT registered cannot add VAT to their charge for services.

Their invoice also has to give their VAT reg number.

The company is either registered or it isn't; they can indeed do so voluntarily, but then they've got a VAT reg number.

If they're not VAT registered then they have no mechanism for paying the VAT on to HMRC, and thus they have to keep it.

prowla

Grumpy_chap said:

You are focusing on the invoice, but have not answered the key question:

Was the agreed price £1,000 and then the sole-trader is seeking to claim VAT on top of that?
OR, was the agreed price £1,200, and you are being charged the agreed price?

A VAT-invoice is only required when a VAT-registered business is selling to another VAT-registered business.  As you are a consumer, it is only the total cost that you need to be concerned about.  It is for the trader to have their tax affairs in order.

On a detail, the charge of £500 "inc VAT" would not suggest a VAT charge of £100.
£500 inc VAT would be £416.67 plus £83.33 VAT making the total of £500.
The VAT rate of 20% is applied to the pre-VAT value.

I think an unregistered business cannot itemise VAT on their invoice.

LoveParasite

Thanks for the replies. I think I now have the information I need.