Tradesman - Price markup on parts

[alan_m]

Not at my local Screwfix. Customers may be trade or individuals but all get served at the same counters.

[John Rumm]

Which seems like a fairly sloppy bit of VAT fraud - especially if someone audits one of his customers, and checks the bona fides of the invoices they are claiming VAT back on.

[John Rumm]

Indeed - and lots of it comes down to buying power, if I need something in 1s and 2s now and then, I am unlikely to get the same pricing as an online discounter buying in the 1000s. Which often means I can get a product into a customer hands cheaper buying from ebuyer than I can going to one of the big disties like Ingram, especially when you factor in delivery costs etc.

[John Rumm]

I was thinking that, but then realised it was an unnecessary qualification :-)

[PeterC]

About 10 years ago I was looking at a Samsung 36" TV. John Lewis £x; best from a 'real' shop £x+150+£25 delivery and 1-year warranty, extra 4 years for quite a lot. JL: £100 cash to reclaim from Samsung, free delivery and a 5-year warranty. That, plus JL being a bus-ride away, plus service - JL it was. Cheaper ain't always less expensive.

[Dave Plowman (News]

Says it all about many trades. They just go for the best deal, not the best product.

As with boilers.

I take it you think the price a maker sells something to various different customers should be controlled by law?

[Dave Plowman (News]

I don't really see anything wrong with that. Maybe even a good thing. Allows you to compare labour rates more directly.

[Dave Plowman (News]

Most won't.

I got a local garage to change the handbrake cable on the old Rover - it's a car in the air job. When they found they couldn't source a new one, they got back to me. And fitted the new one I had.

[tim...]

However perverse it sounds, charging VAT on top of a vat-able price for products bought retail is the correct thing to do

useless he wants to risk getting caught at a VAT audit he will be passing this VAT on, not pocketing it

[Andrew]

Non-franchised (back street) places just buy from the cheapest trade outlet. Neighbour can get a pair of front disks for less than £20 but even he says they are rubbish so goes for something that has a trade price of about £35/pair. Then they phone the local franchised dealer to see what the manufacturers price is and that's what they charge for the cheapo stuff !!.

[Andrew]

They are all private individuals, generally older folk who cannot afford main dealer servicing on their 8+ YO whatever. Many of them were his customers when he did have a premises and a proper business. He has been 'retired' for a few years and is of the opinion that "I have paid plenty of tax when I ran my garage business". HMRC think he is just filling his time watching daytime TV I guess.

His clients all probably think he is still 'in business' so don't query it, or the handwritten invoice and pay mostly in cash anyway.

He's a bit thick in many ways. I've had arguments before about the trade vs 'retail' pricing. As a private person he pays VAT on the trade price and the customer never sees his trade account or invoice. QED he can charge whatever he likes, but he is adamant that he 'has' to charge the 'retail' price, and probably thinks he 'has to' charge VAT too !, but his VAT number went with the garage business he sold years ago.

[Chris Green]

Not really I don't think.

If the tradesman *isn't* VAT registered then he just charges the customer what the item cost (including VAT) plus his markup, no further added VAT.

If the tradesman *is* VAT registered and he has a VAT receipt from the retailer where he bought the item then he claims back the VAT he's paid and charges VAT on the sale of the item to the customer.

The net result for the customer is pretty much the same either way:-

Price (including VAT) + tradesman's markup

Price (ex VAT) + tradesman's markup + VAT

The resulting cost depends on how much the markup percentage is.

[Andrew]

He isn't VAT registered !. That lapsed or went with the garage business that he sold many years ago and 'retired'. Now he does the work on his drive or seems to spend a lot of time at another garage. I often hear him say "I can't get a ramp today, so I;ll have to do it on the drive" !.

One day the motor factor where he has an account might get an audit and they will notice trade accounts that have 'funny' names and will investigate further.

[Andrew]

Local Panny dealer shows price tickets on their window/store stock that is the next SRP up (according to the Panny website) on each TV. Once a year in August they have a 'sale' and reduce the price stickers down to the SRP price that Panasonic show !.

[williamwright]

Actually no, not in this case. We weren't changing makes to get a better deal, we were doing it to boycott a particular manufacturer because they had a policy of selling to the DIY sheds at a lower price than to the trade. The change was mostly to the main competitor, and the quality was at least as good.

No, unlike like you I'm not a statist/commie. They can sell at whatever price pleases them and customers can vote with their feet. That's the free market, an alien concept to the likes of you I think.

Bill

[John Rumm]

If he is VAT registered, then yes he must charge VAT on sales, but at the same time will reclaim VAT on purchases. Hence the tax paid to HMRC is just on the value added to the product or whatever as it moves though his ownership.

If he is not VAT registered, then he can still sell at a profit, but not reclaim the input VAT, or add VAT to his sales.

If not registered, he is not permitted to charge VAT in the first place, and would have no mechanism for paying VAT to HMRC.

[RJH]

When I've wanted to it's been for the much the same reason - manufacturer/known brand (say, Bosch, Brembo) cam belt, disks and pads.

IME they've been pattern or OEM parts - not genuine. So probably fine while any warranty applies.

[Muddymike]

Items supplied through Amazon are not always the same quality as those supplied by Amazon unless branded, even then some are copies.

Having been a supplier to Amazon for ten years Ive seen many instances of crap being sold on the back of an official listing.

Mike

[Dave Plowman (News]

You're very wrong there, Bill.

But the idea of boycotting a product you once thought the best purely because that company does a deal with someone else (without making a difference to the price you pay) seems very odd to me. Unless of course you are ashamed of charging a price for it which is now rather obviously far more than the customer thinks it should be.

Most people can't put up their own external aerials. So just what a shed may sell them for is neither hear nor there.

[alan_m]

The major problem with Amazon is that they lump the reviews from different suppliers together. The reviews are not for individual Amazon marketplace suppliers but for the item. If there are three traders supplying item X but two are selling the genuine item and one a sub-standard counterfeit item there will be three listings for the product and possibly three different prices. When you go to the customer review sections the reviews for all three listings will be identical. There will be a large percentage of the reviews giving five stars because these are from the customers who have got the genuine item and also a substantial number of one star reviews from the people who have received the counterfeit item. From the reviews there is no way of identifying the supplier of the shoddy goods.

When writing a product review Amazon will publish negative reviews about the product but reject any product reviews if the supplier is named and criticised.

Amazon also lump reviews for different products together, usually a range of products from the same manufacturer. This results in reviews mentioning features of a top end variant of a product being included in the listing of a base model.