VAT charged by VAT-registered company but payment had to be made to a non-VAT registered person

Brunnhilde

I had a new kitchen fitted recently. The company who did it supplied the kitchen units, and they charged me for both the kitchen and fitting, applying VAT to it all. However, it was fitted by a self-employed non-VAT registered person and I was required to pay him directly.I am unhappy about being charged VAT for the fitting when I paid someone who is non-VAT registered. Does anyone have any knowledge about such matters please?

Brunnhilde

I need help please on work done to my house by a VAT registered company. They charged me VAT on the total job - materials and labour. However, I had to pay the two workers who did the job independently and neither are VAT registered. They are self-employed. Is it right that I had to pay VAT on the labour when the labourers are not VAT reegistered please?

TheGreenFrog

What does the invoice show regarding the payments you made directly?

grumpy_codger

Generally, for a customer it doesn't matter whether a business is VAT-registered of not. The customer pays the quoted price. Then it's on the business to pay VAT to HMRC or not to pay. Tradespeople quoting some price and then adding VAT to it in the final invoice are crooks.

Like in Tesco  - some prices are  VAT-exempt, some aren't. Do you care? VAT is Tesco's business, not yours.

TheGreenFrog

Where a VAT registered business requests customer to make direct payments to non-VAT registered subcontractors then suspicion is warranted.  For example - builder is VAT registered and quotes £6,000 inclusive of VAT for a job.  Builder ‘subcontracts" the job to non-VAT registered business and asks customer to pay that business directly, in the amount of £4,000.  Builder then sends an invoice (not a VAT invoice) to customer which states VAT inclusive charge of £2,000 in full and final settlement.  Builder then on VAT return shows his supply to customer as being £1,666.67 plus VAT of £333.33.  Profit to builder £1,666.67. Had builder properly subcontracted and paid for the work, his VAT return would show supply of £5,000 and VAT of £1,000.  Profit to builder £1,000 (£5,000 less £4,000 paid to subcontractor). I would suggest that in this case customer should refuse to pay the full amount of the invoice as builder has misled the customer (and possibly HMRC); alternatively customer should refuse to pay supplier directly unless benefit shared.

Section62

Brunnhilde said:

I need help please on work done to my house by a VAT registered company. They charged me VAT on the total job - materials and labour. However, I had to pay the two workers who did the job independently and neither are VAT registered. They are self-employed. Is it right that I had to pay VAT on the labour when the labourers are not VAT reegistered please?

If you paid money directly to the workers then did they give you invoices, or did the main company ask you to pay them a certain amount, and then included their labour on the final invoice?

How did you pay the workers - e.g. notes/cheque/bank transfer?

DE_612183

So the "company" quoted £x for the fitting and added £y VAT = £z

You paid the fitter £z, but you think you should you should only pay £x.

Do you have a receipt for the payment you made?

If so what does it say on it? 

Hoenir

Has the fitter invoiced you? 

Doozergirl

Section62 said:

Brunnhilde said:

I need help please on work done to my house by a VAT registered company. They charged me VAT on the total job - materials and labour. However, I had to pay the two workers who did the job independently and neither are VAT registered. They are self-employed. Is it right that I had to pay VAT on the labour when the labourers are not VAT reegistered please?

If you paid money directly to the workers then did they give you invoices, or did the main company ask you to pay them a certain amount, and then included their labour on the final invoice?

How did you pay the workers - e.g. notes/cheque/bank transfer?

We need the answer to this question to be able to offer an informed opinion.   

Section62

grumpy_codger said:

I think the question was answered in the OP:

JD3 said:

... - no invoices were given, just asked for cash as went through the work

...

Now owe the last £5k ...

That was the original OP.

grumpy_codger

Ha-ha..........