Help Needed - Dispute with Contractor

Radsteral

Hi there, new to the forum and not sure is this is the right section ...

Hopefully someone can help a financial query I have ...

I run a small building company and recently won a contract to render the outside of 8 new build houses .. (for a large main contractor) ...

We signed contracts .. and when the time came, I ordered the materials .. (k-rend) .. (just under £5000 worth) ...

The Main contractor then informed me that they were in disupte with the client and could I place the order on hold? .... but as the K rend had already been specially made to order, and I'd already paid for it, I couldn't cancel ..

The main contractor says they'll still have the materials (which are as yet not delivered) and sent me a cheque last week for approx £4000 ...

I then queried this and said that actual cost to me was almost £5000 .... to which they said ..."Yes the cheque was for the materials which are off site. As you are not registered VAT, we cannot pay you the VAT element.
The Inland Revenue asks for the VAT Registration Number of your company.

Sorry nothing much can be done."

Can anyone suggest what's the best option I could do ... I think they're a reasonably reputable builder to deal with but I don't see why I should be approx £1000 down just because I am not vat registered ...?

Sorry for the long post but any help / advice will be appreciated ...

I have instructed the supplier not to deliver/release the materials without my express written permission until I can resolve this ...

Bean_Counter

Radsteral wrote: »

I run a small building company and recently won a contract to render the outside of 8 new build houses

If they are new build houses are they not zero rated for VAT?

Could you not just ask the K rend supplier to zero rate his bill to you?

Radsteral

Bean_Counter wrote: »

If they are new build houses are they not zero rated for VAT?

Could you not just ask the K rend supplier to zero rate his bill to you?

Yes, the houses are totaly new build ... does this really mean that I should not have to pay VAT on the materials though ... ?

Be good if it does!

Off to google it now but still grateful for any thoughts / advice ... :beer:

Bean_Counter

Hmm, I have just re-read your post and I'm afraid I think I was wrong before.

As the supplier is purely supplying the materials and no services (because you are providing the service of putting the render on), then the supplier will be correct in standard rating the supply.