Help! I Think I've C**ked Up The VAT
Posted 09 July 2015 - 04:58 PM
I know we're eligible, it's the rate that we should have been charged VAT by various suppliers. (Our labour has all been done with non-VAT registered builders/tradesmen so that's not an issue thank heavens.)
I thought if it wasn't a 'builder' i.e. not labour, just if they were supplying building stuff (windows, blocks, steels, concrete what have you) they could charge 20% and I could reclaim all of that. But looking through VAT notice 708 I now think it implies I should have been charged 5% for things like the windows and concrete - and it's only that 5% I can claim back, if I've been charged 20% wrongly I've c**ked up and have to take the hit.
So what rate should the plumber/electrician/concrete supplier etc charge for me to be able to claim it back?
And if the answer is 5%, and they've already charged me 20% do I stand any chance of getting them to reissue invoices with the correct amounts?
And how do I get the right rate charged in future?
Posted 09 July 2015 - 05:06 PM
If it should have been only 5% but 20% was paid - then I wouldn't worry about it - and reclaim the lot.
Maybe the VAT office will pick you up on this - but I'd be surprised. The alternative is for the supplier to reissue invoices, reclaim the extra from the VAT office and pay it to you - which would be a lot of hassle all round.
Posted 09 July 2015 - 05:08 PM
Posted 09 July 2015 - 05:12 PM
There is no mechanism for me to reclaim the VAT. I have no choice but pay 20% VAT and pass it on to my customers. There is no way I could only charge you 5% without being out of pocket.
For this reason, when working for self builders, I get the customer to buy all the materials, so he can claim back the VAT he pays and I then charge labour only, which of course not being VAT registered there is no VAT on my labour.
Posted 09 July 2015 - 05:20 PM
ProDave, that's what we did with our builder, paid for their labour and bought all the materials ourselves. I'm happy about that side of things, it's the other trades and suppliers I'm not so sure about.
Posted 09 July 2015 - 06:57 PM
Labour only (eg bricklayers) see - Para. 7.1 They should charge you 5% which you reclaim from HMRC.
Installation of Windows - Para 7.3 "..you can reduced-rate any works of repair... snip ...or improvement (such as the construction of an extension or the installation of double glazing) carried out to the fabric of the building."
If they supply _and_ install the window I believe it should all be at 5% which you reclaim. However what does the receipt actually say? If it just mentions the supply of windows then I think the HMRC will probably allow you to reclaim 20% if that's what you were charged. eg it will be treated like "materials".
This would also apply to the concrete floor.
If they are reluctant to charge you 5% refer them to Vat 708 and (although it's not necessary) you can try giving them a home made "certificate" based on para 17 and 18.1
Edited by temp, 09 July 2015 - 06:58 PM.
Posted 09 July 2015 - 08:57 PM
I read/re-write PhDs and translate Arts-Council-speak for a living, and I struggle with finding my way round the the government stuff.
Posted 10 July 2015 - 10:46 AM
OK so the windows should be standard rated (20%) to you and you reclaim that from the VAT man.
The notes at the end of the reclaim form say...
Eligible building materials that a business both supplies and installs follow the same VAT liability as the service. This means that if the service is reduced-rated then the building materials will be too.
In other words your windows are treated as "materials" because they were supply only. Had they also installed them then they should have been reduced rated.
If the people supplying screed also install it then they should reduce rate the lot.
There are several sections on the form depending if the VAT is itemised or not on the receipt. This is really only intended to help with the VAT calculation. Now we have computers the separate sections are just a pain.
Hopefully you are aware that you can use a spread sheet as long as you use the same section headings.
Edited by temp, 10 July 2015 - 10:48 AM.
Posted 10 July 2015 - 10:51 AM
Q Why do Schools in Holland only have single period lessons?
A Because nobody wants double Dutch.
Posted 11 July 2015 - 09:53 AM
The concrete floor is being supplied and installed by the company so I"ve got them to change the invoice for us - they'd never heard of it before, which seems odd given I've seen the same company do new builds on Grand Designs.
What I hadn't taken on board before is the different rate depending on what you were doing e.g. conversion 5%, new build 0%. I don't see the logic behind that at all. Or any of it TBH - if you can claim it all back, why not make it 0% from the start?
Posted 11 July 2015 - 04:06 PM