VAT on a product replacement just outside of warranty?

dearcity

Hi all

I'm looking for some advice of whether I need to pay VAT on a product replacement just outside of warranty. It is a window film on my consevatory that is a couple of months outside of a five year warranty and has failed. 

The supplier is willing to come to a joint share of the cost replacement, so there is an understanding and appreciation that the product should not have failed just outside warranty (and we are almost certain it was failing before) - so my question is with that understanding and intent do we still need to pay additional VAT on our share of the replacement cost?

The suppliers feels it is a hard cutoff, but I couldn't find any advice one way or the other online.

Thanks for the help.

eskbanker

Surely any scenario involving a negotiated resolution, rather than invoking clear legal rights, has no meaningful restrictions on what can and can't be included in the price?

Hoenir

Any supply that is liable to VAT will be charged VAT. The company has no say in the matter. Those are the official rules. 

dearcity

This is the HMRC advice I was looking at: "When the manufacturer makes a repair under this warranty there is no supply for VAT purposes, even if new parts are supplied. This is because the original goods were costed to allow for such repairs and to tax the warranty repair again would result in double taxation."

Grumpy_chap

The manufacturer does not appear to be making a repair under warranty.

It appears as though the manufacturer is agreeing to provide a replacement at a negotiated discount below the normal selling price.  The resulting price is then subject to VAT in the normal way.

dearcity

Yes, makes sense. Thanks.