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  • FIRST POST
    • MSE Guy
    • By MSE Guy 24th Jan 11, 4:00 PM
    • 1,628Posts
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    MSE Guy
    0 WOW
    MSE News: How to avoid duping by VAT fraudsters
    • #1
    • 24th Jan 11, 4:00 PM
    0 WOW
    MSE News: How to avoid duping by VAT fraudsters 24th Jan 11 at 4:00 PM
    This is the discussion thread for the following MSE News Story:

    "Consumers should beware firms that illegally charge VAT and then pocket the cash meant for the taxman ..."

Page 1
  • oakhouse13
    • #2
    • 24th Jan 11, 4:17 PM
    • #2
    • 24th Jan 11, 4:17 PM
    I would have thought a much bigger problem was customers asking to pay cash for 20% off.

    What is your evidence that builders claiming 20% of their invoice is VAT when it isn't is a bigger problem than customers who want to pay cash for building work for 20% off?
    Last edited by oakhouse13; 24-01-2011 at 4:18 PM. Reason: Typo
    • Consumerist
    • By Consumerist 24th Jan 11, 4:38 PM
    • 5,226 Posts
    • 2,610 Thanks
    Consumerist
    • #3
    • 24th Jan 11, 4:38 PM
    • #3
    • 24th Jan 11, 4:38 PM
    I would have thought a much bigger problem was customers asking to pay cash for 20% off.
    Originally posted by oakhouse13
    Well, at 20% VAT, it's about 16.7% off the price really.

    Customers wouldn't ask for a "discount for cash" if small companies didn't comply with such requests. This kind of transaction can't be officially invoiced so the customer is often left without any comeback if there are any problems.
    Warning: In the kingdom of the blind, the one-eyed man is king.
  • oakhouse13
    • #4
    • 24th Jan 11, 5:31 PM
    • #4
    • 24th Jan 11, 5:31 PM
    The amount of cash payment is what I'd always thought was the main VAT avoidance problem in the building trade. How is there so much cash if customers are not paying in cash? Why does anyone pay in cash?

    http://www.taxonice.co.uk/our-services/resources/107-taxman-clamps-down-on-cash-payments-to-builders
    Last edited by oakhouse13; 24-01-2011 at 5:42 PM.
  • mineallmine
    • #5
    • 24th Jan 11, 6:08 PM
    • #5
    • 24th Jan 11, 6:08 PM
    Quote:
    How to spot a fraudster
    If you are suspicious about a firm you can find out if the VAT registration number it uses is genuine.
    The European Union has a website to check this. It is designed for businesses to use but is nevertheless accurate.

    Does this website verify only that particular VAT Registration number exists - in which point thats daft as a fraudster could quote another company's (legitimate) VAT number and it would come as a "valid number."

    Or does it verify that particular VAT Registration number belongs to a named business?

    • Debt Free Dreamer
    • By Debt Free Dreamer 24th Jan 11, 6:53 PM
    • 1,239 Posts
    • 1,245 Thanks
    Debt Free Dreamer
    • #6
    • 24th Jan 11, 6:53 PM
    • #6
    • 24th Jan 11, 6:53 PM
    Quote:
    How to spot a fraudster
    If you are suspicious about a firm you can find out if the VAT registration number it uses is genuine.
    The European Union has a website to check this. It is designed for businesses to use but is nevertheless accurate.

    Does this website verify only that particular VAT Registration number exists - in which point thats daft as a fraudster could quote another company's (legitimate) VAT number and it would come as a "valid number."

    Or does it verify that particular VAT Registration number belongs to a named business?

    Originally posted by mineallmine
    I think it names the Business.
    I want to be credit card and loan free by Christmas 2010
    • Debt Free Dreamer
    • By Debt Free Dreamer 24th Jan 11, 6:55 PM
    • 1,239 Posts
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    Debt Free Dreamer
    • #7
    • 24th Jan 11, 6:55 PM
    • #7
    • 24th Jan 11, 6:55 PM
    I think it names the Business.
    Originally posted by Debt Free Dreamer

    Yep... Here is Argos

    Yes, valid VAT number
    VAT number GB 145899025 Member State GB Name ARGOS LIMITED Address TAX & TREASURY DEPT
    AVEBURY
    489-499 AVEBURY BOULEVARD
    CENTRAL MILTON KEYNES

    MK9 2NW
    Consultation Number Date when request received 24/01/2011 (dd/mm/yyyy)
    I want to be credit card and loan free by Christmas 2010
    • zenmaster
    • By zenmaster 24th Jan 11, 8:31 PM
    • 3,052 Posts
    • 3,281 Thanks
    zenmaster
    • #8
    • 24th Jan 11, 8:31 PM
    • #8
    • 24th Jan 11, 8:31 PM
    Firms that don't have to pay VAT.
    Companies with annual turnover below 70,000 are exempt so don't have to pay the sales tax.
    This is a little simplistic.

    1. It does not only apply to companies. Business is the operative word, which may be
    • an individual
    • a partnership
    • a company
    • a club
    • an association
    • a charity
    • any other organisation or group of people acting together under a particular name, such as an educational or health institution, exhibition, conference, etc.

    2. Whilst it is not compulsory, a business may register for VAT with a turnover of less than 70k if they wish to.

    3. A registered business may not deregister until their regular turnover falls below 68 and, again, only if they wish to.
    Last edited by zenmaster; 24-01-2011 at 8:33 PM.
    • ZTD
    • By ZTD 24th Jan 11, 8:44 PM
    • 23,730 Posts
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    ZTD
    • #9
    • 24th Jan 11, 8:44 PM
    • #9
    • 24th Jan 11, 8:44 PM
    So remember kids, VAT is money owed by a business to the government, and not actually much to do with you, the consumer, except it makes your prices higher. As does NI, income tax, corporation tax, landfill duty tax etc etc...

    You, as a good and loyal subject of the crown, should spend your time and your effort to spot businesses not paying VAT because the government wants you to. This message was brought to you by MSE.

    If you don't the government will go home crying to its mum.

    Now, I expect this "public service announcement" twaddle from the BBC, who are after all, a tax-fuelled propaganda machine. I don't expect it from a nominally independent MoneySavingExpert. But then again, if you're pushing your agenda such as financial education into the political arena, you've got to expect to have an agenda pushed back in a "mutual back scratching" exercise.

    There's a price to be paid for everything.
    "Follow the money!" - Deepthroat (AKA William Mark Felt Sr - Associate Director of the FBI)
    "We were born and raised in a summer haze." Adele 'Someone like you.'
    "Blowing your mind, 'cause you know what you'll find, when you're looking for things in the sky."
    OMD 'Julia's Song'
  • mustrum_ridcully
    So remember kids, VAT is money owed by a business to the government, and not actually much to do with you, the consumer, except it makes your prices higher. As does NI, income tax, corporation tax, landfill duty tax etc etc...

    You, as a good and loyal subject of the crown, should spend your time and your effort to spot businesses not paying VAT because the government wants you to. This message was brought to you by MSE.

    If you don't the government will go home crying to its mum.

    Now, I expect this "public service announcement" twaddle from the BBC, who are after all, a tax-fuelled propaganda machine. I don't expect it from a nominally independent MoneySavingExpert. But then again, if you're pushing your agenda such as financial education into the political arena, you've got to expect to have an agenda pushed back in a "mutual back scratching" exercise.

    There's a price to be paid for everything.
    Originally posted by ZTD
    Did you even read the article (or listen to Money Box)?

    In case you didn't... One part was about companies who aren't VAT registered charging people VAT and this extra money is then pocketed. As an example, you get a gardener in to do some work and instead of paying 500 you pay 600 because "they have to charge VAT".
    "One thing that is different, and has changed here, is the self-absorption, not just greed. Everybody is in a hurry now and there is a 'the rules don't apply to me' sort of thing." - Bill Bryson
    • ViolaLass
    • By ViolaLass 24th Jan 11, 9:59 PM
    • 5,592 Posts
    • 7,723 Thanks
    ViolaLass
    Thank you zenmaster, I was concerned that the way that point was made might lead to companies being accused of not having registered for VAT because they're under the threshold when they could, in fact, have chosen to. I think MSE's point is valid but it is important to get these points right and to be clear.
    • ZTD
    • By ZTD 24th Jan 11, 10:15 PM
    • 23,730 Posts
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    ZTD
    Did you even read the article (or listen to Money Box)?

    In case you didn't... One part was about companies who aren't VAT registered charging people VAT and this extra money is then pocketed. As an example, you get a gardener in to do some work and instead of paying 500 you pay 600 because "they have to charge VAT".
    Originally posted by mustrum_ridcully
    No, instead of paying 600 you pay 600. Total difference to you 0. It's the government who loses out when they don't pay the VAT to the government - the consumer pays *exactly* the same either way.
    "Follow the money!" - Deepthroat (AKA William Mark Felt Sr - Associate Director of the FBI)
    "We were born and raised in a summer haze." Adele 'Someone like you.'
    "Blowing your mind, 'cause you know what you'll find, when you're looking for things in the sky."
    OMD 'Julia's Song'
    • corbyboy
    • By corbyboy 24th Jan 11, 10:54 PM
    • 1,137 Posts
    • 1,378 Thanks
    corbyboy
    No, instead of paying 600 you pay 600. Total difference to you 0. It's the government who loses out when they don't pay the VAT to the government - the consumer pays *exactly* the same either way.
    Originally posted by ZTD
    I was actually going to post something similar to you earlier but backed out as I expected to get slated.

    As a consumer all I am interested in is the final price.

    When I take my car to the garage and they quote me "300 plus VAT" my reply is "not interested in that. How much money do I need to hand over to you?" It honestly drives me crazy when I get given a price that doesn't include VAT.

    As ZTD says in the gardener example, I am paying them 600. Why should I care if some of this is VAT or not? Whether they are charging VAT or not, I am still parting with the same amount of cash.

    If VAT is a transaction between the business and the Government then why should I get involved?
    • MSE Guy
    • By MSE Guy 25th Jan 11, 11:17 AM
    • 1,628 Posts
    • 1,255 Thanks
    MSE Guy
    That made me smile as that was the same company I used to test the service. Great minds think alike, eh? ;-)


    Yep... Here is Argos

    Yes, valid VAT number
    VAT number GB 145899025 Member State GB Name ARGOS LIMITED Address TAX & TREASURY DEPT
    AVEBURY
    489-499 AVEBURY BOULEVARD
    CENTRAL MILTON KEYNES

    MK9 2NW
    Consultation Number Date when request received 24/01/2011 (dd/mm/yyyy)
    Originally posted by Debt Free Dreamer
    Last edited by MSE Guy; 25-01-2011 at 11:30 AM.
    • Percy1983
    • By Percy1983 25th Jan 11, 11:23 AM
    • 4,990 Posts
    • 7,824 Thanks
    Percy1983
    No, instead of paying 600 you pay 600. Total difference to you 0. It's the government who loses out when they don't pay the VAT to the government - the consumer pays *exactly* the same either way.
    Originally posted by ZTD
    As they aren't paying VAT yet charging you, you are being ripped off by 100.

    If they aren't paying the VAT over I am not paying the VAT to them.
    • MSE Guy
    • By MSE Guy 25th Jan 11, 11:28 AM
    • 1,628 Posts
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    MSE Guy
    On a personal note, this made me laugh.

    To suggest we are under pressure from the Government to print articles that fits its agenda is about as wide of the mark as you can get.

    If we had thinner skin we may even see it as insulting to our journalistic integrity but we can take it here .

    All we are trying to do is warn about a fraud that is not always obvious and that catches some people out.


    So remember kids, VAT is money owed by a business to the government, and not actually much to do with you, the consumer, except it makes your prices higher. As does NI, income tax, corporation tax, landfill duty tax etc etc...

    You, as a good and loyal subject of the crown, should spend your time and your effort to spot businesses not paying VAT because the government wants you to. This message was brought to you by MSE.

    If you don't the government will go home crying to its mum.

    Now, I expect this "public service announcement" twaddle from the BBC, who are after all, a tax-fuelled propaganda machine. I don't expect it from a nominally independent MoneySavingExpert. But then again, if you're pushing your agenda such as financial education into the political arena, you've got to expect to have an agenda pushed back in a "mutual back scratching" exercise.

    There's a price to be paid for everything.
    Originally posted by ZTD
    Last edited by MSE Guy; 25-01-2011 at 11:59 AM.
  • Stephen Leak
    The bit I like is that the fraudster charges you false VAT, effectively stealing that money from you, but then has to pay it back - to the government.

    I think I know who the bigger fraudster might be.
    • ZTD
    • By ZTD 25th Jan 11, 7:24 PM
    • 23,730 Posts
    • 42,889 Thanks
    ZTD
    As they aren't paying VAT yet charging you, you are being ripped off by 100.
    Originally posted by Percy1983
    You're not being ripped off. You're getting exactly the same goods/services for exactly the same money. It is the government who is getting ripped off.

    Now if you're thinking "If they're not paying the VAT on VAT rated goods, then I want some money back", then instead of the headline being "How to avoid duping by VAT fraudsters", it should be "How to ensure you're always given the opportunity to participate in a conspiracy to defraud HM Revenue and Customs."

    Which although more accurate, isn't quite as snappy.
    "Follow the money!" - Deepthroat (AKA William Mark Felt Sr - Associate Director of the FBI)
    "We were born and raised in a summer haze." Adele 'Someone like you.'
    "Blowing your mind, 'cause you know what you'll find, when you're looking for things in the sky."
    OMD 'Julia's Song'
    • ZTD
    • By ZTD 25th Jan 11, 8:22 PM
    • 23,730 Posts
    • 42,889 Thanks
    ZTD
    On a personal note, this made me laugh.

    To suggest we are under pressure from the Government to print articles that fits its agenda is about as wide of the mark as you can get.

    If we had thinner skin we may even see it as insulting to our journalistic integrity but we can take it here .
    Originally posted by MSE Guy
    Journalism is not about repeating the words some politico has spoken on an issue the government of the day has decided is important. That's PR.

    Journalism is about creating your own story and bringing facts to the attention of the public that were not on anyone's radar. Watergate was journalism (for example). Telling people to take their flu jabs, wash behind both ears and pay their taxes is just PR.

    All we are trying to do is warn about a fraud that is not always obvious and that catches some people out.
    Originally posted by MSE Guy
    Not paying VAT only catches one entity out, the only entity that eligible to receive it: The government. The government is not a people.

    And to claim that if the government doesn't receive a tax from an company you've had a commercial transaction with, then you've been duped is as silly as it sounds. If that company pays half the VAT, does that mean you been half-duped? Or perhaps you can claim your transaction was paid over properly and you're un-duped, but the guy after you had all his VAT retained, so he's fully-duped.

    As I said. A silly concept.
    "Follow the money!" - Deepthroat (AKA William Mark Felt Sr - Associate Director of the FBI)
    "We were born and raised in a summer haze." Adele 'Someone like you.'
    "Blowing your mind, 'cause you know what you'll find, when you're looking for things in the sky."
    OMD 'Julia's Song'
    • Percy1983
    • By Percy1983 25th Jan 11, 8:29 PM
    • 4,990 Posts
    • 7,824 Thanks
    Percy1983
    I would feel ripped off, in short if they are going to avoid the VAT then I want my cut.

    Either way, if they are charging you full and not handing it over why not report them? the more money the government gets from VAT the less they need to charge us working people.
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