VAT Avoidance, criminal record + fine?

[mjn]

An extremely long story cut short. My builder has given me a price for a job, that was too high, so told him we weren't interested. He came back with a better price, and we said yes to the work.

Now it turns out that this price does not include VAT, and so should the job have been completed, we wouldn't have paid any VAT.

Now, we have told the builder not to come back to site (due to other problems) and his reply is that he will report us for not paying VAT. This equals a £15k fine and a criminal record.

How true is this? And if we don't have any bills which itemise anything, are we liable for anything?

[eric pisch]

I believe the law requires you to include VAT (if you are vat registered) in any price when dealing with a none company. I believe the law will look at any quotation like this as having vat included in the price.

As long as you have invoices and reciepts and have not payed cash the only one in trouble is him.

[PoochJD]

Hi,

I can't help much here, but if the builder were to report you for non-payment of VAT, there are 2 questions I would raise in my defence, namely:

1) How can I pay VAT for work that has a) not been completed, and b) for which you (the builder) have not given me any paperwork for? Surely any figures he quotes you, are just that - figures. The fact he is now claiming after starting the job for you, that VAT isn't included would be a) illegal, and b) dodgy for him, as the quote would then be suspect. (I'm sure builders must have to supply quotes, that DO include VAT, don't they?!)

2) Secondly, I would say to the builder: "If you want to report me, for alleged non-payment of VAT, would you be happy for the Tax Man to go through your past 5-10 years worth of tax records, to make sure that every single job you've completed had been properly taxed, and nothing had slipped through the cracks, so to speak?!

Presumably, he would NOT want his previous jobs to be investigated for any potential tax evasion issues, so it may give him food for thought.


Pooch

[Kebabhead]

His revised price was it a written or verbal?

[signs]

Originally Posted by mjn

An extremely long story cut short. My builder has given me a price for a job, that was too high, so told him we weren't interested. He came back with a better price, and we said yes to the work.

Now it turns out that this price does not include VAT, and so should the job have been completed, we wouldn't have paid any VAT.

Now, we have told the builder not to come back to site (due to other problems) and his reply is that he will report us for not paying VAT. This equals a £15k fine and a criminal record.

How true is this? And if we don't have any bills which itemise anything, are we liable for anything?

I would say no ..

just say the price the builder gave as far as you were aware included VAT

As a side note you should always get receipts for building work ,just as an acknowledgement he has done the work

[Kebabhead]

If he is VAT registered he has to charge you VAT where applicable

read more about it here Para 3

[mjn]

The contract states the revised price. Where the line in very small text says, "This price includes VAT" it is crossed out. And i feel this may be our down fall. However, we could claim ingorance and say that we "thought all prices were VAT exempt" and we were adding VAT to the original price as well.

[mjn]

Originally Posted by Kebabhead

If he is VAT registered he has to charge you VAT where applicable

read more about it here Para 3

Thanks for that. I might grass him up anyway. We have some invoices, but none mention VAT.

[signs]

Originally Posted by mjn

The contract states the revised price. Where the line in very small text says, "This price includes VAT" it is crossed out. And i feel this may be our down fall. However, we could claim ingorance and say that we "thought all prices were VAT exempt" and we were adding VAT to the original price as well.

I still can't see how this would effect you , at the end of the day it's his company and he that is trying to defraud the customs and excise , but hey what do i know , i make signs

[Greg]

I'm confused, you say in your first post the work has not been done, so what is the problem?

Just tell the builder to off and get someone reputable in.

[unique]

Originally Posted by mjn

An extremely long story cut short. My builder has given me a price for a job, that was too high, so told him we weren't interested. He came back with a better price, and we said yes to the work.

Now it turns out that this price does not include VAT, and so should the job have been completed, we wouldn't have paid any VAT.

Now, we have told the builder not to come back to site (due to other problems) and his reply is that he will report us for not paying VAT. This equals a £15k fine and a criminal record.

How true is this? And if we don't have any bills which itemise anything, are we liable for anything?

you pay the invoice, and it's up to the company/soletrader/partnership to pay the VAT to HMRC. the customer isn't requried to pay VAT seperately to HMRC

from what you say, he didn't do the work, and you haven't paid him anything, thus i'm not sure what the problem is, unless he has previously submitted you invoices that you have paid, and he is now saying that it's your fault that he hasn't charged you VAT and you haven't paid it? that's his problem as it's up to him to charge you the VAT and request and ensure payment for it. you couldn't tell if he was VAT registered or not

you can call the HRMC helpline for advice, they don't need your personal details for general advice. you can also make them aware of what he is doing

[mjn]

Some of the work is already done, and we've paid him £xxk. Due to other factors we have told him not to attend again, on advice of our solicitor.

[mjn]

Thanks to everybody who has replied so far, most helpful

[Desmo]

He threatened to report YOU for not paying HIS VAT?

If he thinks you owe him money, that's one thing. But there's only one person responsible for paying his VAT...and it's not you.

[matr69]

Originally Posted by mjn

An extremely long story cut short. My builder has given me a price for a job, that was too high, so told him we weren't interested. He came back with a better price, and we said yes to the work.

Now it turns out that this price does not include VAT, and so should the job have been completed, we wouldn't have paid any VAT.

Now, we have told the builder not to come back to site (due to other problems) and his reply is that he will report us for not paying VAT. This equals a £15k fine and a criminal record.

How true is this? And if we don't have any bills which itemise anything, are we liable for anything?

That is hilarious, all he would be doing would be grassing hismelf up! You have no need to worry my friend.

He charges the VAT, all his responsibility.

Flouting the law and shoddy work come hand in hand in my experience.