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Car crash fence damage, VAT on top of VAT?
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Hi all, hoping someone in the know may be able to advise.
One of my family members recently crashed his car into the metal security fencing of a company's property. The company has sent him (well, sent to mum) an invoice for the cost repairs, which have been carried out.
On the invoice, it shows the cost +VAT added for the repair, totalling £1776, however the company has spoke to mum and said to note that VAT will be charged on top of the repair cost... Is this allowed? As that means the company is actually then surely getting more than the total cost of repair.
Hope that makes sense,
Thank you
One of my family members recently crashed his car into the metal security fencing of a company's property. The company has sent him (well, sent to mum) an invoice for the cost repairs, which have been carried out.
On the invoice, it shows the cost +VAT added for the repair, totalling £1776, however the company has spoke to mum and said to note that VAT will be charged on top of the repair cost... Is this allowed? As that means the company is actually then surely getting more than the total cost of repair.
Hope that makes sense,
Thank you
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Comments
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The company doesn't "get" VAT, the Treasury does.2
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The insurance company should nave been handling this from the start of the accident0
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The repair bill will almost certainly include both a VAT exclusive and a VAT inclusive figure. VAT is payable on the exclusive figure, taking it to the inclusive.
So...
£1,776 + VAT = £2,131 inc VAT
- or -
£1,776 inc VAT = £1,480 + VAT
As he's not VAT registered, if he was paying it himself, he would have to pay the VAT inclusive price - but obviously he only needs to pass the invoice to his insurer, and move on with life.
Unless, of course, he's planning on fraud by not claiming, paying himself, and pretending this never happened when he gets insurance quotes in the future? Very daft idea indeed, which will very likely come back to bite him HARD.
Also, not exactly the moral highground to complain about the company whose property he damaged having to charge VAT on the cost, while simultaneously defrauding insurers.1 -
So the company whose fence was crashed into has a repair bill that is £1480+VAT (£1776).
And they sent the mum an invoice for £1776 + VAT (which would be £2131)?
That cannot be correct. Has she explicitly been told that, or does the invoice just say something along the lines of VAT will be added at applicable rate?
Notwithstanding whether this is/should be going via the insurers, I can't see how the company can apply VAT to the repair cost. The mum/insured person is not purchasing a service from the company.1 -
MeteredOut said:So the company whose fence was crashed into has a repair bill that is £1480+VAT (£1776).
And they sent the mum an invoice for £1776 + VAT (which would be £2131)?
That cannot be correct. Has she explicitly been told that, or does the invoice just say something along the lines of VAT will be added at applicable rate?
Notwithstanding whether this is/should be going via the insurers, I can't see how the company can apply VAT to the repair cost. The mum/insured person is not purchasing a service from the company.0 -
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Mildly_Miffed said:The repair bill will almost certainly include both a VAT exclusive and a VAT inclusive figure. VAT is payable on the exclusive figure, taking it to the inclusive.
So...
£1,776 + VAT = £2,131 inc VAT
- or -
£1,776 inc VAT = £1,480 + VAT
As he's not VAT registered, if he was paying it himself, he would have to pay the VAT inclusive price - but obviously he only needs to pass the invoice to his insurer, and move on with life.
Unless, of course, he's planning on fraud by not claiming, paying himself, and pretending this never happened when he gets insurance quotes in the future? Very daft idea indeed, which will very likely come back to bite him HARD.
Also, not exactly the moral highground to complain about the company whose property he damaged having to charge VAT on the cost, while simultaneously defrauding insurers.Mortgage free
Vocational freedom has arrived1 -
Tell your mum, to send the invoice back. She has no obligations in this matter. Ask the company to see the 3 quotations they got before commencing the work. If they can’t, leave them to it.Mortgage free
Vocational freedom has arrived2 -
sheslookinhot said:Mildly_Miffed said:
Unless, of course, he's planning on fraud by not claiming, paying himself, and pretending this never happened when he gets insurance quotes in the future? Very daft idea indeed, which will very likely come back to bite him HARD.
Also, not exactly the moral highground to complain about the company whose property he damaged having to charge VAT on the cost, while simultaneously defrauding insurers.
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MikeJXE said:The insurance company should nave been handling this from the start of the accident
Failure to disclose could result in cancellation of insurance which could make £2k seems like not a lot0
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