VAT problem - any advice please ??

[gb]

Last week I ordered some double glazing units £2060 inc VAT.

So what should I pay when I go pick them up next week ???

The price quoted, even thou it does say inc VAT, or at the new VAT rate.

[geoff]

In message , gb writes

It will be the VAT rate in force at the time that the invoice is generated IWHT

There is no reason for them to charge you 17.5 rather than 15% that I can think of - its not their money, so it should make no difference to them

You should get that small discount which will enable you to kickstart the economy single handedly

[The Medway Handyman]

The new rate of 15%. The Govmint sets the VAT rate, the supplier meerly acts as an unpaid tax collector. £2060 - 14.89% + 15%.

£1753.27 + 15% VAT = £2016.26 inc

The £43 saving should be spent on beer - its the law.

[Andy Burns]

Depends on the "Tax Point" which can happen when they're delivered/collected or earlier if they've already issued an invoice, or you've paid a deposit.

Given that the price has been quoted inc VAT then there's no reason that the supplier *has* to reduce the ex VAT price, but worth £43 to ask if they can/will keep the net price the same and charge VAT at 15%.

[Ron Lowe]

Also, you need to consider whether they have already incurred expense at the old VAT rate which they need to pass on.

[Rod]

Why?

The tax point of the invoice is, IIRC, the only thing that matters. Gievn a substantial proportion of the input to the product is likely labour, so there would usually be plenty of VAT income to cover that already paid out.

[geoff]

In message , Ron Lowe writes

If they were charged VAT on the bits at 17.5% then they claim that VAT back at 17.5% on their VAT return - or am I missing something ?

THis quarter's VAT returns are going to be a complete dogs dinner

[somebody]

In message , gb writes

The VAT rate to be used is based on the supply date or 'tax point'. There are exceptions but the general rule is that the tax point occurs on completion of supply or completion of a service.

Regardless of how your supplier calculates the tax point, it definitely couldn't have been before you ordered them. According to HMRC guidance as that would have been after the 18th November, the tax rate depends on the invoice date being pre/post 1st December. This is the first time I've ever known an invoice date to influence the tax rate, as opposed the tax point.

So, if the supply point is after 18th Nov, and the invoice date is on or after 01 Dec, it must be charged at the new rate.

See page 2 of

If they do go for the new rate or old, I would tend to think that from a purely legal perspective, they quoted you an "Inc Vat" price, and could therefore hold you to it (and in doing so increase their actual take).

One little question to ask yourself, if VAT had gone up rather than down... how strongly would you have wanted to hold them to the inclusive price rather than the exclusive price to which you would clearly now prefer ;-)

Hth Someone

[R D S]

No, thats right, it is a point which is confusing a lot of people though. My other half suffered it the other day and mentioned it in a routine visit to the accountant who by all accounts was scratching his head, which is a worry TBH.

[Bob Eager]

It's entirely up to them. They quoted you a price with all taxes paid. The price might still be £2060 with all taxes paid.

[Steve Firth]

Well, the VAT note I received recently seems to say that 15% should be charged on all invoices raised on or after 1st December, irrespective of when the work was done or started *provided* that the work did not start more than 14 days before 1st of December.

[Ron Lowe]

Oh, OK. Yes, I see now.

[Old Git]

Not sure of the veracity of this guys post but on the face it looks like a big blooper or as he says, a scam, trying to make a quick buck before too many prople catch on.

[Old Git]

[tim.....]

That's just the office reiterating the "tax point rules" because they just know that (almost) no-one's going to look them up if they leave it to people to do so.

The VAT rate that applies will be the one at the "Tax Point".

This is the earliest of: date of supply, date of invoice or date of payment (unless you issue the invoice less than 14 days after the date of supply in which case that date becomes date of invoice).

For the OP: A quote is not an invoice. Paying a deposit will count as a "payment" of that sum, this will make life difficult for some people :-(.

HTH

tim

[geoff]

it looks like a pure price rise - VAT is not added before the checkout stage

try harder ...

[geoff]

In message , tim..... writes

No its not - it was official notification of change in VAT rate, without which it would be exceedingly foolhardy to make a change

No, I'm sure its not, if goods are supplied in November and invoiced in December, the VAT rate will be 15%, the VAT rate in force on the date of invoicing

can you imagine the a company who does a 30 day invoicing scheme in mid december being able to actually generate correct invoices ?

[dennis]

He has agreed to a quote inc VAT. Unless it stated VAT at 17.5% it is still a valid quote. They just make more profit.

However I expect they will charge the lower rate.

[nightjar]

A lot of companies have said they will not be passing on the reduction in VAT. Having spent the past week working on implementing the change on my main product lines, I can sympathise. I still have a few thousand prices to review for silly looking prices - a penny or two over a round pound value for example. The rate change has produced a huge amount of work for no practical advantage.

Colin Bignell

[R D S]

nightjar The rate change has produced a huge amount of work for no

No, no, the tills will be ringing, the prospect of saving £1 in every £40 will have people flocking in spending their redundancy money.

I'm not changing any ticket prices. Our industry doesn't attract 17.5% VAT so it doesn't apply to us. That said I am expecting people to argue about it and where they do I will make the appropriate reduction at the till, just to keep the peace.