I remember the massive 1979 increase was effective the Monday following the budget speech. The point is that it’s a sum decided on by the government over which the person preparing the quotation and subsequent invoice has no control. If a company quotes £6k all inclusive and the VAT rate goes up, they’d be relying on the goodwill of the customer to stump up any extra.
Customer not happy with VAT portion of my invoice.. advice needed!
- Thread starter electroplated
- Start date
I remember the massive 1979 increase was effective the Monday following the budget speech. The point is that it’s a sum decided on by the government over which the person preparing the quotation and subsequent invoice has no control. If a company quotes £6k all inclusive and the VAT rate goes up, they’d be relying on the goodwill of the customer to stump up any extra.
danny la rouge
More like *fanny* la rouge!
I refer you to my final sentence here: Customer not happy with VAT portion of my invoice.. advice needed!
StoneRoad
heckling from the back!
Most of my estimates and my standard terms say "Vat will be charged at the rate applicable at the time of invoicing, at the date of this letter, that is 20%" and VAT is shown as a separate column / line on each invoice.
For a recent job, the VAT was paid separately to the main total for work and materials.
For a recent job, the VAT was paid separately to the main total for work and materials.
Saul Goodman
It's all good, man
Business to Business quotes/prices are always exclusive of VAT. It's a different matter if it's Joe Public you're dealing with. I think it's actually illegal to post VAT exclusive prices to Joe Public (at least in the retail sector), but I've always assumed B2B prices to be exclusive of VAT, as I'm sure your customer does.
quimcunx
imprimeo, lamino, distribuo
Maybe he's just hoping you'll do it 'cash in hand'.
When I'm getting someone come in and do work in my house I do not know if s/he earns above the threshold or not so I would expect them to give me a quote that includes VAT; that makes clear there will be VAT and how much. If s/he says that will be £200 I will take £200 out of the cash machine to pay them. It is surely sensible for the person who is doing this sort of thing every day, working for people who quite possibly haven't encountered trades giving quotes that don't include VAT even though VAT will be added, to be clear if it is applicable.
I suggest you explain that you will be out of pocket if you reduce the bill.
When I'm getting someone come in and do work in my house I do not know if s/he earns above the threshold or not so I would expect them to give me a quote that includes VAT; that makes clear there will be VAT and how much. If s/he says that will be £200 I will take £200 out of the cash machine to pay them. It is surely sensible for the person who is doing this sort of thing every day, working for people who quite possibly haven't encountered trades giving quotes that don't include VAT even though VAT will be added, to be clear if it is applicable.
I suggest you explain that you will be out of pocket if you reduce the bill.
Bahnhof Strasse
Met up with Hannah Courtoy a week next Tuesday
Very much this. If your work is of value to them they should pay for it. You're already giving them mates-rates.
IME once you give in to people like that they come back and take you for a mug forever. Not worth the agg.
electroplated
off minehead
Thanks everyone for the replies so far.
To clarify a couple of things, this was a business to business quote, which in my experience as others have mentioned are commonly accepted to be ex. VAT.
Clearly I should have double checked they were aware of the fact I was VAT registered and as such would need to add VAT to the price I agreed for the work, but on this occasion I failed to do so as it was all done very informally and last minute over the phone the night before the job needed to take place.
I'll certainly be adding my VAT number to my work email signature and making sure any prices discussed by phone are followed up with an email confirmation.
In terms of resolving the situation, I am still mulling over how best to reply...
To clarify a couple of things, this was a business to business quote, which in my experience as others have mentioned are commonly accepted to be ex. VAT.
Clearly I should have double checked they were aware of the fact I was VAT registered and as such would need to add VAT to the price I agreed for the work, but on this occasion I failed to do so as it was all done very informally and last minute over the phone the night before the job needed to take place.
I'll certainly be adding my VAT number to my work email signature and making sure any prices discussed by phone are followed up with an email confirmation.
In terms of resolving the situation, I am still mulling over how best to reply...
Saul Goodman
It's all good, man
After re-reading the thread, I think you should ask the person who supplied the original quote if VAT was mentioned on the quote.
pseudonarcissus
fluttering and dancing
So, are you going to give a discount for cash, or what? 
Not sure it works like that if they can successfully argue they thought the quoted price included VAT.
equationgirl
Respect my existence or expect my resistance
I don't do a lot of invoice work, but our standard terms and conditions normally state that quotes are issued ex VAT. At the very least I would expect someone to check if they weren't sure. I haven't seen a professional services invoice that didn't have VAT on it, certainly I've never done one that was for an inclusive price.
Given that this has been done as a short notice favour for a friend and the company has been in business for a longer time than the supplier, I think they are trying it on. I would reiterate the price is ex VAT, that a discount has already been applied, and that you can't reduce the VAT due because HMRC doesn't allow you that discretion.
I know you don't want to burn bridges but a firm restating of the facts shouldn't do that.
Given that this has been done as a short notice favour for a friend and the company has been in business for a longer time than the supplier, I think they are trying it on. I would reiterate the price is ex VAT, that a discount has already been applied, and that you can't reduce the VAT due because HMRC doesn't allow you that discretion.
I know you don't want to burn bridges but a firm restating of the facts shouldn't do that.
Gromit
International Man of Misery
A quick google says this:
No, a tradesperson is not acting within the law if they add VAT in an invoice if it wasn't also clear in the quote.
To do so is a misleading omission under The Consumer Protection from Unfair Trading Regulations 2008.
The Pricing Practices Guide section 2, while having no mandatory force, is easy to read and explains to traders that.
From what you say you didn’t make it clear so they do have grounds to complain, even if they should know and are trying it on it’s still unfortunately your bad for not saying ‘plus VAT’ in your conversation.
No, a tradesperson is not acting within the law if they add VAT in an invoice if it wasn't also clear in the quote.
To do so is a misleading omission under The Consumer Protection from Unfair Trading Regulations 2008.
The Pricing Practices Guide section 2, while having no mandatory force, is easy to read and explains to traders that.
From what you say you didn’t make it clear so they do have grounds to complain, even if they should know and are trying it on it’s still unfortunately your bad for not saying ‘plus VAT’ in your conversation.
AnnaKarpik
Queen of all she surveys
The key point is, would the consumer have made a different choice if they had known that VAT was payable. I got that from the gov.uk site.
electroplated
off minehead
I sent them a reply last night stating that I had no choice but to charge VAT and that as the quote was from one business to another it was standard practice to be ex. VAT. I also offered to split the difference with them on this occasion to try to resolve the situation in a way that was fair to both of us.
This morning I checked my business bank balance it turns out they had already decided to transfer the amount minus VAT to my bank account 2 days ago, before receiving any response from me, which has really pissed me off frankly as it suggests they have simply decided what they think they owe and paid it without any actual discussion/negotiation. Wanker.
This morning I checked my business bank balance it turns out they had already decided to transfer the amount minus VAT to my bank account 2 days ago, before receiving any response from me, which has really pissed me off frankly as it suggests they have simply decided what they think they owe and paid it without any actual discussion/negotiation. Wanker.
Schmetterling
I saw something nasty in the woodshed!
What bastards. Is there any way you can withhold part of your work?
It’s annoying really that you were doing them a favour but now they’re unwilling to help out in return and would rather take further advantage.
I’d be having a word with the mate who put you onto them.
I’d be having a word with the mate who put you onto them.
StoneRoad
heckling from the back!
Invoice them separately for the VAT that they owe from the original invoice, plus the time that solving this collection dispute has cost you at whatever hourly rate you normally charge plus a premium for the aggro, give them 7 days to pay, then threaten them with court / collection action for this new total amount.
Giving them the option to pay the VAT immediately without further action on your part has now coat you several hours of time, phone calls etc so they owe you more money.
Giving them the option to pay the VAT immediately without further action on your part has now coat you several hours of time, phone calls etc so they owe you more money.
ricbake
working out how
How about suggesting that you think this is completely unfair and you will write to HMRC with full details to ask for their help in resolving the issue - they maybe fiddling their turnover to avoid being VAT registered (the threshold is just £85,000). They will probably just pay rather than risk being investigated.
AnnaKarpik
Queen of all she surveys
If you don't want the hassle of chasing them, bear in mind that you can treat the amount they have paid as VAT inclusive.
cupid_stunt
Chief seagull hater & farmerbarleymow's nemesis.
I was at a business breakfast this morning, and on my table was a solicitor, so I took the opportunity to grab some free advice.
His view is that you shouldn't assume another business is VAT registered when quoting, nor assume they know you are VAT registered, and therefore should always advise the quote is plus VAT. In his view he doesn't think the VAT element can be enforced in the situation detailed here.
I guess other solicitors may take a different view.
In respect of late payers it's worth knowing about the Late Payment of Commercial Debts Regulations 2013, which amended the Late Payments of Commercial Debts (Interest) Act 1998 - these are statutory charges you can levy, without them being specified in your T&C's.
I find these very useful, I re-issue invoices with a statutory late payment charge of £40 per invoice, advising the client that it can be deducted if paid within 7 days, this tends to work a treat in most cases.
http://www.osborneclarke.com/media/...34204e2/late-payments-of-commercial-debts.pdf
His view is that you shouldn't assume another business is VAT registered when quoting, nor assume they know you are VAT registered, and therefore should always advise the quote is plus VAT. In his view he doesn't think the VAT element can be enforced in the situation detailed here.
I guess other solicitors may take a different view.
In respect of late payers it's worth knowing about the Late Payment of Commercial Debts Regulations 2013, which amended the Late Payments of Commercial Debts (Interest) Act 1998 - these are statutory charges you can levy, without them being specified in your T&C's.
I find these very useful, I re-issue invoices with a statutory late payment charge of £40 per invoice, advising the client that it can be deducted if paid within 7 days, this tends to work a treat in most cases.
http://www.osborneclarke.com/media/...34204e2/late-payments-of-commercial-debts.pdf
electroplated
off minehead
I was at a business breakfast this morning, and on my table was a solicitor, so I took the opportunity to grab some free advice.
His view is that you shouldn't assume another business is VAT registered when quoting, nor assume they know you are VAT registered, and therefore should always advise the quote is plus VAT. In his view he doesn't think the VAT element can be enforced in the situation detailed here.
Thank you for that, that's very helpful
That sounds fairly conclusive and I think I'm going to have to chalk this one up to experience. I'm still deeply unimpressed with this particular persons behaviour of course but not planning on taking further action at this stage...
Bahnhof Strasse
Met up with Hannah Courtoy a week next Tuesday
Thank you for that, that's very helpful
I'm still deeply unimpressed with this particular persons behaviour of course but not planning on taking further action at this stage...
I would seriously avoid doing any work for them again. IME fuckers like that take the piss, then creep back a year later or so when they've burnt bridges elsewhere or just had shoddy service, and expect you to be grateful for their patronage. If your work is of value, fuck 'em off if they show their faces again.
High Voltage
In the top 97% of Urban's most interesting posters
If you haven't already, I'd let your "friend" know about this as well
cupid_stunt
Chief seagull hater & farmerbarleymow's nemesis.
I agree with that.
The client I mentioned back in post #23, the one I used The Sheriff's Office to collect the debt, only called me again about 9 months later wanting me to do more for him.
I did consider doing it on a prepaid basis, but then discovered he owed money all over the place, so decided to tell him to do one.
Bahnhof Strasse
Met up with Hannah Courtoy a week next Tuesday
I agree with that.
The client I mentioned back in post #23, the one I used The Sheriff's Office to collect the debt, only called me again about 9 months later wanting me to do more for him.
I did consider doing it on a prepaid basis, but then discovered he owed money all over the place, so decided to tell him to do one.
It's the brass-neck of these people! Then again I really couldn't sleep at night if I had debts all over the shop, these folk seem to have no such issues.
cupid_stunt
Chief seagull hater & farmerbarleymow's nemesis.
Yeah, I've only ever had to take one to court in over four years, thought I was going to have to take a second one to court - cheeky fucker, he ignored my invoices, e-mails, voice-mails & text messages. I checked his 'limited company' on the companies house website, only to find it wasn't registered & therefore doesn't exist, but I found two other companies with similiar names he had, both dissolved before he engaged me, slippery as hell!
Needless to say it set alarm bells going! So, I re-issued the 3 invoices to his own name trading as XXXXX, adding a late payment charge of £40 to each & gave notice of county court action, suddenly he's decided to play ball!
What they don't get, is this is a fairly small town, and word gets around, being a member of the local Chamber & another business group, these people become a topic of discussion.
AnnO'Neemus
Is so vanilla
They're taking the piss. If you stepped in at the last minute to help out a friend, and them, you'd think they might be grateful you were only charging them 'mates rates' + legally applicable VAT. For stepping in at the last minute and getting them out of a hole, you could've charged a premium for short-notice - I mean, calling out a plumber, electrician, mechanic, etc is always more expensive when they come to your rescue at short notice, that's a given.
You've already given them a discount by charging 'mates rates' to help out your friend,and now they've taken the piss by deducting the VAT so they've effectively awarded themselves a double discount at your expense, when you did them a massive favour by stepping in to help them out at the last minute.
That's just not cricket.
You've already given them a discount by charging 'mates rates' to help out your friend,and now they've taken the piss by deducting the VAT so they've effectively awarded themselves a double discount at your expense, when you did them a massive favour by stepping in to help them out at the last minute.
That's just not cricket.
AnnO'Neemus
Is so vanilla
Btw, I don't know how you do your invoices, but I know some businesses would set out their invoices to record discounts, so they'd put eg services provided £10,000 - 10% discount, so amount due = £9,000 + VAT kind of thing, rather than £9,000 + VAT, because then it's already there in black and white that they're getting a good deal. People might be less inclined to take the piss.
Also, they can't just choose not to pay VAT.
Also, they can't just choose not to pay VAT.
