Car crash fence damage, VAT on top of VAT?

MeteredOut

Mildly_Miffed said:

MeteredOut said:

The mum/insured person is not purchasing a service from the company.

Yes, they are. They're purchasing a repair to the fence they damaged.

No they're not. They're paying an invoice for repairs to property they damaged.

OP, did the mum receive the original repair invoice, and told VAT would be payable on top, or did they receive an invoice from the company where property was damaged, and told VAT was to be added? If the latter, what was the description of the item/service being invoiced?

I'd certainly not be paying an invoice from the company.

MeteredOut

Mildly_Miffed said:

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.

In what way are insurers being “defrauded” ?

By a policyholder lying about their driving history in order to get a lower price than would be the case if truthful answers were given?

Where has the OP said the policyholder is lying about their driving history? They are perfectly within their rights to settle the damages themselves and you don't know that they will not declare this loss to their insurer.

MeteredOut

bex88 said:

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.

Yes this is exactly right and what I (and his mum) was wondering. Yes she has spoke to a lady from the company today and she said that there will be VAT added on top of that repair bill invoice.

I'm hoping this is just a training issue/misunderstanding and the she spoke to an admin at the company who assumed that VAT is added to all invoices. 

What size/sort of company is it?

Mildly_Miffed

MeteredOut said:

Mildly_Miffed said:

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.

In what way are insurers being “defrauded” ?

By a policyholder lying about their driving history in order to get a lower price than would be the case if truthful answers were given?

Where has the OP said the policyholder is lying about their driving history? They are perfectly within their rights to settle the damages themselves and you don't know that they will not declare this loss to their insurer.

Perhaps I should have clarified by saying something like...

"...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?"

Oh, hold on.

bex88

MeteredOut said:

Mildly_Miffed said:

MeteredOut said:

The mum/insured person is not purchasing a service from the company.

Yes, they are. They're purchasing a repair to the fence they damaged.

No they're not. They're paying an invoice for repairs to property they damaged.

OP, did the mum receive the original repair invoice, and told VAT would be payable on top, or did they receive an invoice from the company where property was damaged, and told VAT was to be added? If the latter, what was the description of the item/service being invoiced?

I'd certainly not be paying an invoice from the company.

She has received a copy of the original repair invoice, which shows VAT added. And then told by a lady she spoke to today from the company who has said to note that VAT will be added on top of that.

bex88

MeteredOut said:

bex88 said:

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.

Yes this is exactly right and what I (and his mum) was wondering. Yes she has spoke to a lady from the company today and she said that there will be VAT added on top of that repair bill invoice.

I'm hoping this is just a training issue/misunderstanding and the she spoke to an admin at the company who assumed that VAT is added to all invoices. 

What size/sort of company is it?

A very well-known large car manufacturer / dealership.

MeteredOut

bex88 said:

MeteredOut said:

Mildly_Miffed said:

MeteredOut said:

The mum/insured person is not purchasing a service from the company.

Yes, they are. They're purchasing a repair to the fence they damaged.

No they're not. They're paying an invoice for repairs to property they damaged.

OP, did the mum receive the original repair invoice, and told VAT would be payable on top, or did they receive an invoice from the company where property was damaged, and told VAT was to be added? If the latter, what was the description of the item/service being invoiced?

I'd certainly not be paying an invoice from the company.

She has received a copy of the original repair invoice, which shows VAT added. And then told by a lady she spoke to today from the company who has said to note that VAT will be added on top of that.

One way to fix this is to tell the company that she can't pay an invoice she doesn't have and ask them to produce the invoice she is being asked to pay. Tell them she needs it for her insurers. The process of the company having to produce an invoice with their own company VAT details should hopefully make them realise they're being silly.

I think its probably a mistake rather than the company actually trying to fiddle things.

Could also ask to speak to the manager/whoever is their financial controller.

Car_54

Mildly_Miffed said:

MeteredOut said:

Mildly_Miffed said:

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.

In what way are insurers being “defrauded” ?

By a policyholder lying about their driving history in order to get a lower price than would be the case if truthful answers were given?

Where has the OP said the policyholder is lying about their driving history? They are perfectly within their rights to settle the damages themselves and you don't know that they will not declare this loss to their insurer.

Perhaps I should have clarified by saying something like...

"...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?"

Oh, hold on.

Indeed, why would anyone be willing to pay £2,000-ish rather than letting his insurer deal unless there were an ulterior motive? Or perhaps no insurer?

DullGreyGuy

bex88 said:

MeteredOut said:

bex88 said:

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.

Yes this is exactly right and what I (and his mum) was wondering. Yes she has spoke to a lady from the company today and she said that there will be VAT added on top of that repair bill invoice.

I'm hoping this is just a training issue/misunderstanding and the she spoke to an admin at the company who assumed that VAT is added to all invoices. 

What size/sort of company is it?

A very well-known large car manufacturer / dealership.

Are they dealing with it themselves or have they farmed it out to an accident management company or such?

There are circumstances where things can be VAT on VAT but that is typically done by agreement when the initial payer is on a flat rate VAT scheme etc so cannot recover the VAT on the original invoice but has to charge the VAT on the invoice they raise. A dealership will be far to big to be on such a scheme and so if they are dealing with it themselves they should bill you the net price of repairs as they can recover the VAT from HMRC themselves. They aren't 'adding value' so shouldn't be adding VAT on top but this is a commonly debated matter and even more so for exempt things like train tickets where A bills B + VAT as they aren't selling a train ticket but selling the service of having gone out and bought a train ticket. 

I'm not a VAT expert but certainly paying VAT on VAT is wrong in this case.

400ixl

Only if their policy was in the thousands already would it possibly worth it. For most people they would not get bills over the next few years that are that level even if they didn't have a protected no claims.

If it were a young driveron the policy, maybe.