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MSE News: How to avoid duping by VAT fraudsters
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Former_MSE_Guy
Posts: 1,650 Forumite
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 ..."
"Consumers should beware firms that illegally charge VAT and then pocket the cash meant for the taxman ..."
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Comments
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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?0 -
oakhouse13 wrote: »I would have thought a much bigger problem was customers asking to pay cash for 20% off.
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.
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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-builders0 -
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?
Declutter 300 things in December challenge, 9/300. Clear the living room. Re-organize storage
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Fab thread: Long daily walks0 -
mineallmine wrote: »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?
I think it names the Business.I want to be credit card and loan free by Christmas 20100 -
Debt_Free_Dreamer wrote: »I think it names the Business.
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 20100 -
This is a little simplistic.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.
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.0 -
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'0 -
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.
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 Bryson0 -
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.0
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