VAT claim

GorgeousG · 15 September 2018 at 3:13PM

Hi
Can someone help us, my partner is a self employed courier and has been "employed" with the same company for over 10 years. Recently it was announced that a whistleblower had found out that when they charged a customer VAT, 10% should go to the courier and the company keeps the rest, however, the company hasn't been doing this and none of the couriers have been receiving the VAT amount. My partner was contacted by a firm who said they are going through all the couriers and getting this payment back dated. They said they could only go back 4-5 years.which resulted in most couriers getting around £4,000 which you can imagine is a lot of money. Anyway they looked into my partners and said that he is only entitled to money backdated to February of this year!!!! They said as my partner left inbetween Sept 2017 until Feb 2018, he is not entitled to the backdated money which you can imagine has infurated my partner especially for the amount of time he has been with the company.

My partner did not leave but took time out due to a back injury, the company who are robbing so and so's kept billing him for clothes and an app so his manager closed his driver number!! Meaning he was not employed by the company during this time. However, my partner is self employed so never "left" as he was never employed in the first place! Surely he is entitled to the 4 years as this was not the companies to keep!?

Can anyone advise as we really are at a loss to this. Apparently they are on a flat rate whatever that means.

Anyone else in a similar situation, we are thinking of getting legal advice but don't want to waste little money we have if it is not worth it.

Thanks and sorry for the essay!

McKneff · 15 September 2018 at 4:28PM

I am puzzled. If a customer is charged vat, the whole of the vat should go to the tax man.
Why would the courier get any. WHO HAS BEEN 'looking into it'
It all sounds a bit dodgy

gettingtheresometime · 15 September 2018 at 5:06PM

McKneff wrote: »

I am puzzled. If a customer is charged vat, the whole of the vat should go to the tax man.
Why would the courier get any. WHO HAS BEEN 'looking into it'
It all sounds a bit dodgy

HMRC use companies as a cheap/easy way of collecting VAT so why would self employed couriers get to keep any amount of VAT?

I agree with McKneff - it sounds totally dodgy OP

Caz3121 · 15 September 2018 at 5:50PM

GorgeousG wrote: »

Hi
when they charged a customer VAT, 10% should go to the courier and the company keeps the rest, however, the company hasn't been doing this and none of the couriers have been receiving the VAT amount.

I expect you will get asked for some money upfront at some point as this sounds dodgy.
If the company is VAT registered they will indeed charge their customers VAT. This VAT amount will be due to be paid to the tax man.
If your husband is VAT registered then he would have included VAT on his invoice to the company and they could offset against their VAT bill he would be required to pass that on to the tax man in his returns. Nobody keeps the VAT

as an aside I would question the IR35 position and wouldn't be surprised if that is investigated unless he was working for other companies as well. The 'employer' calls people self employed to get out of paying NI, holiday pay etc

antrobus · 15 September 2018 at 6:17PM

GorgeousG wrote: »

Hi
Can someone help us, my partner is a self employed courier and has been "employed" with the same company for over 10 years. Recently it was announced that a whistleblower had found out that when they charged a customer VAT, 10% should go to the courier and the company keeps the rest, however, the company hasn't been doing this and none of the couriers have been receiving the VAT amount. My partner was contacted by a firm who said they are going through all the couriers and getting this payment back dated. They said they could only go back 4-5 years.which resulted in most couriers getting around £4,000 which you can imagine is a lot of money. Anyway they looked into my partners and said that he is only entitled to money backdated to February of this year!!!! They said as my partner left inbetween Sept 2017 until Feb 2018, he is not entitled to the backdated money which you can imagine has infurated my partner especially for the amount of time he has been with the company.

My partner did not leave but took time out due to a back injury, the company who are robbing so and so's kept billing him for clothes and an app so his manager closed his driver number!! Meaning he was not employed by the company during this time. However, my partner is self employed so never "left" as he was never employed in the first place! Surely he is entitled to the 4 years as this was not the companies to keep!?

Can anyone advise as we really are at a loss to this. Apparently they are on a flat rate whatever that means.

Anyone else in a similar situation, we are thinking of getting legal advice but don't want to waste little money we have if it is not worth it.

Thanks and sorry for the essay!

I suspect that the following applies;

the VAT rate for courier services under the flat rate scheme is 10%

some courier companies have opted for the flat rate scheme but used the standard rate of VAT at 20% when accounting for their self employed couriers

as in, customer is charged £12 less £2 VAT, we owe you £10 less our cut, when it should have been £12 less £1.09 VAT we owe you £10.91 less our cut

I am guessing mind you.

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