Insurance claim VAT

Pallis

A family member suffered severe structural and water damage to their home in the recent gales.
The insurance company surveyors have been in and reported back on works required.
The insurance company offer is for the full amount of the insurance company's preferred  contractor except for £1200 VAT. This they have been  told is for the policy holder to pay.
I can find lots of information on this, but most revolves around VAT rated companies and individuals.
Can anyone offer any guidance on this situation as it refers to an ordinary householder, as it seems wrong to make policyholders pay this as well as the excess.

XRS200

They normally pay the VAT after the work is done.  Get them to agree to pay it when you provide an invoice to show it was paid.

DullGreyGuy

Pallis said:

A family member suffered severe structural and water damage to their home in the recent gales.
The insurance company surveyors have been in and reported back on works required.
The insurance company offer is for the full amount of the insurance company's preferred  contractor except for £1200 VAT. This they have been  told is for the policy holder to pay.
I can find lots of information on this, but most revolves around VAT rated companies and individuals.
Can anyone offer any guidance on this situation as it refers to an ordinary householder, as it seems wrong to make policyholders pay this as well as the excess.

VAT is paid to HMRC, VAT registered companies simply collect it on behalf of HMRC and passed on hence why it doesn't appear in company accounts, the money is a priority debt for an insolvent company etc because its never theirs. As such it doesn't become yours either.

If you ask for cash in lieu of repairs it will be paid net of VAT, your not VAT registered so dont have a way to pass it to HMRC. In a similar way if you used a small trades person thats not VAT registered you'd expect their prices to be lower. 

If you intend to get the work done by professionals most insurers will reimburse the VAT up to the maximum of the original quote upon presentation of VAT invoices but you should have this confirmed with the insurer before proceeding.