Query VAT on Estate Agents invoice

Willis75

Not sure if this is forum to ask but cannot see where else to post.

Engaged an estate agent to sell my property at a fixed price, Shown on my contract, the agreed price. Agent a ‘one’ man band. Just her business. Not registered for VAT.

I have just completed my house sale today, received the estate agents invoice. No VAT Reg number on the invoice but has now added VAT to the agreed commission.

When I queried this with her, she said she is now registered for VAT and requests I now pay VAT on top of the agreed figure on the contract.

From my perspective I dont feel this is correct. If indeed she has since registered then I feel she should recalculate the agreed comission and take VAT out of that and her take the loss, not me.

Anyone in the know could advise, please? Thanks

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/6681170/query-vat-on-estate-agents-invoice

What does the contract explicitly state about VAT?

Assuming its totally silent on VAT then the price doesnt change and they have to absorb the cost.

If the contract is explicit that the price was exempt of VAT then they can add it but as its a contract with a consumer the term has to be prominent and not just hidden away on page 23

la531983

You have a contract so tell her to go whistle, her tax affairs are not your problem as a consumer.

Willis75

https://forums.moneysavingexpert.com/discussion/comment/82116910#Comment_82116910

It does not mention VAT, and my further searching has found that in 2016, The Property Ombudsman announced that EA must include VAT in their calculations and show their commission due inclusive of VAT. Thanks

mta999

Yes pretty much every consumer sale must show the price inclusive of VAT

If it were me I would only pay the price agreed

UKTaxHelper

Ask her for the VAT number and the date it took effect. She can't show VAT on an invoice before the number comes through, which is likely why it isn't there. Right now that's just a higher price, not VAT.

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/comment/82117032#Comment_82117032

Digital Markets, Competition and Consumers Act 2024 is a much stronger position than an ombudsman, 230(4) states that the price must include all taxes, fees etc. (2)(c ) of the same does give a slight carve out where its not possible to give the total price up front but then it states there must be clear instructions on how the price is to be calculated.

Its may be acceptable that they were unable to predict when the VAT registration was going to happen so 2c applies however they didnt make it clear that VAT was going to be added to the price if applicable and so the price stays at what it was stated to be

martindow

For a business registering for VAT this is a problem. They can't charge VAT before getting their number, which may take a few weeks, and must charge it afterwards. However this is their problem - they have quoted a price and unless it was explicit that VAT may be added, they must apportion the money you give them to split out the payment to HMRC.

Assuming they have an accountant, they should have been advised how to deal with this.

I agree that you should just pay the agreed sum.

FreeBear

Further to comments above, if she is VAT registered and charging you VAT, then she should be including the VAT number on the invoice.

user1977

https://forums.moneysavingexpert.com/discussion/comment/82117475#Comment_82117475

I don't think she needs to unless the client is also VAT-registered.