[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.

[Jenn]

As others have said, he's responsible for paying the VAT to HMRC, not you.

[eric pisch]

Originally Posted by Jenn

As others have said, he's responsible for paying the VAT to HMRC, not you.

Grass him up to the VAT man they are pitbulls and have more power than the courts

[Magslad]

I know it's just repeating what others have said, but my brother-in-law works for HMRC, and he focuses mainly on investigating VAT avoidance. He happens to be staying with us this week so I showed him the post and he laughed out loud - suffice to say it is the builder who would be in trouble rather than you.

In fact, he said you could always put the boot on the other foot - and threaten the builder that you will report him to HMRC for VAT avoidance. The fact that the builder has crossed out the VAT part of the contract just plays into HMRC's hands that he was trying to avoid it. Obviously you shouldn't really do this unless you discuss it with your solicitor, but serves to highlight just how far wide of the mark your builder is with his ridiculous threats.

All the best getting it all sorted

[ukdan]

lol that builder sounds like he's two bricks short of a wall l

[Paddy!]

As said above, the VAT is HIS responsibility. If you're a company and will be claiming back any of the VAT you've paid to him, it may be a bit different but I'm guessing you're a private customer??

If he's crossed that bit out about paying the VAT on the invoice and seriously thinks it makes a difference, firstly he's an idiot and secondly just tell him to report you and that your answer to any investigation will be "He crossed it out and said he wouldn't charge the VAT if I paid him cash".

[bodoman]

As a surveyor for a building company, the responsibilty for paying vat to hmrc
is the builders, he should issue you with an invoice showing the vat separately
and the invoice should also have his vat registration number on it.

Even if he did issue a proper vat invoice, say for £1000.00 plus vat = £1150.00 and you paid him just the £1000.00, he would still be liable to pay vat as part of the £1000.00, it would work out at £870.00 plus £130.00 vat (near enough)

[Phil57]

Tell him you are a member of AV Forums which has many members that are somewhat better informed than him on matters of right and wrong.
Laugh in his face and tell him to sod off.

[carling]

Originally Posted by PoochJD

Hi,


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

This. The tax man would not be very interested in you for one transaction that may or may not be dubious but they would be VERY interested in a building firm that could very well have been doing this for years.

Get in first and phone the tax helpline. Even if this were 50/50 the person who voluntarily reports it almost always gets believed.

[Kieron]

If he contacts you again tell him you have already spoken to HMRC giving them all the details and as such have taken their advice.

Then close the door as he runs to his van to change his underwear.

[alnwrd]

Check out this article from HM Revenue & Customs

VAT - Value Added Tax : Directgov - Money, tax and benefits

[philofcas]

Makes you wonder if he's used that line before, i reckon there's a fair chance people have fallen for it, agree with all the others, HE's responsible for paying VAT, not you.

He sounds like a complete w*nker to me.

Hope you get the situation sorted.

[mjn]

Thanks for all the help guys. We've heard nothing from them all weekend, but am expecting some kind of letter next week instead.

In a another twist, its looks like they haven't built the walls tall enough for the roof

[paul1967]

Is the ceiling height 2.4 or more.

[dejongj]

It's unfortunately but I blame a lot of the large companies for this kind of a confusion. Citroen was famous for doing deals without the VAT, which is just rubbish...They are liable for the VAT, so why don't they just say they give an x% discount....

This builder is a total idiot. It is always the suppliers responsibility, never yours...

[mjn]

Originally Posted by paul1967

Is the ceiling height 2.4 or more.

No, i'm 5' 11''. And the ceiling would be about 6 inches above my head!