Hidden VAT in online purchase

highlander58

Can a mainly trade business sell to a private customer without saying VAT will be added?

I bought goods from UK website selling mainly to hospitality trade, but also accepting private orders, ie I didn’t have to supply a VAT number, or otherwise prove I was trade. After buying it - I realised they’d added 20% VAT - even though they didn’t mention it before.

All item & basket pages displayed just 1 price, with no indication they were ex-VAT prices. The only place it mentioned & added VAT was the final checkout page. On basket page - it just said (in smaller, less prominent print) that “shipping & taxes” to be calculated at checkout. It didn’t actually mention the word VAT so I thought that ‘taxes’ just referred to any taxes that might apply to overseas orders, which can only be calculated at checkout when delivery address is entered - as with shipping. So - having checked the price in basket - I just went & paid at checkout - not noticing the price had changed. Oops!

As a UK consumer, my VAT rate was known from the outset, so if they’re prepared to sell to me as well as trade - shouldn’t they display a VAT price, or at least indicate from the outset that 20% VAT will be added?

If so - how do I play this, given I’ve already paid for the goods & they’re now in transit? Can I require the business to refund me the 20% VAT, since they didn’t mention it when they should have? If they refuse a refund - can I claim Section 75 via my card?

As for Trading Standards - shouid I report it or give the business an opportunity to put things right first? And if I do report to Trading Standards - will they actually do anything about it?

Isthisforreal99

How about naming the site?

Think your best case scenario is returning the order for a full refund. They are not going to refund the VAT. What makes you think S75 applies?

Ayr_Rage

As they DID mention any applicable taxes and shipping would be added and you were not entitled to buy without paying VAT then you've no chance of getting the VAT refunded.

As above, a return for a full refund is the best outcome you can expect.

Keep_pedalling

You would have seen the total price before you paid, so why did you actually place the order.?

born_again

Why would they refund VAT if it is payable on the item?

Did you not notice that 20% had been added at checkout Yet you knew that  “shipping & taxes” were added at checkout? Especially as S75 would require per item price (not total inc P&P) to be over £100 🤷‍♀️

No S75, as no breach of contract &/or misrepresentation given the above quoted part.

Grumpy_chap

Can the OP name the website?

Sometimes these trade-focused sites have a statement that all displayed prices are "+VAT".

Sometimes these trade-focused sites have a toggle switch for VAT included or excluded.

Exodi

highlander58

Can I require the business to refund me the 20% VAT, since they didn’t mention it when they should have?

I think you stand exactly 0% chance of that happening. I think you're also confused - a business would have had to pay VAT too… it's just 'trade prices' are shown net (ex VAT) because the VAT businesses are charged is not that important as it is typically reclaimed or offset from HMRC as input tax (as VAT is levied on the item in its final form when sold - known as output tax, otherwise VAT would be being charged and compounding multiple times across the whole supply chain).

It would be useful to see the site. Many sites that sell to both the public and trade have a toggle between Inc VAT and Exc VAT e.g. https://www.kenable.co.uk/networking/network-patch-cables/ethernet-cat6-patch-cables

I'm not sure "I just went & paid at checkout - not noticing the price had changed. Oops!" cuts it, but perhaps the simplest solution will be to ask to refund it…

Woodstok2000

It would help to see the website in question, but the DTI guidance is fairly clear on what retailers need to do.

If you are selling to private consumers it is absolutely not enough to just say "taxes applied later" or that they showed the full price (inc VAT) at the end - the price has to show VAT in some way, see the quoted legislation below.

However those above are correct that you're not going to get the VAT back - it's a full refund (with return of the goods) or nothing.

https://www.legislation.gov.uk/uksi/2005/2705/made

Valued Added Tax

(i) Price indications to consumers

2.2.7 All price indications you give to private consumers, by whatever means, should include VAT.

(ii) Price indications to business customers

2.2.8 Prices may be indicated exclusive of VAT at an outlet or through advertisements from which most of your business is with business customers. If you also conduct business at that outlet or through these advertisements with consumers, however, you should make clear that the prices exclude VAT and you should:

(a) display VAT inclusive prices with equal prominence, or;

(b) display prominent statements that the quoted prices exclude VAT and state the appropriate rate.

strawb_shortcake

Digging deep here, but many years ago I used to shop at Makro, none of their prices included VAT and this was added to your bill at check out.

If a business primarily deals with trade accounts I thought it was pretty standard to not include VAT as many businesses will be able to claim that back? Again this is Digging deep and going back maybe 25 years ago when I touched on accounting.

QrizB

In my case, it’s true that VAT was added to the price on the final shipping page. So if I’d noticed that change on the very final stage of the process - I would not have bought it.

You seem to be saying that (using some fake prices here) you were happy to buy the goods for £100, and you were happy to then pay "taxes and shipping" of £25 for a total of £125, but if the goods had been listed as £120+VAT=£120 and "taxes and shipping" had been £5 for exactly the same total of £125, you wouldn't have gone ahead?

That's seems illogical.

Woodstok2000

https://forums.moneysavingexpert.com/discussion/comment/82154937#Comment_82154937

It is illegal under the Price Marking Order 2004.