Tradesman - Price markup on parts

[bert]

Been doing that for a new oven recently. Definitely takes more than a few seconds!!!!!

[Tim Lamb]

In message [e-mail]>, "Dave Plowman (News)" [e-mail]> writes

I've noticed that. The Fiesta could do with a new tail box. Nobody appears to stock such a thing and *on line* prices seem all over the place.

[alan_m]

There is often a large difference in price for car tyres (incl fitting) when buying/booking on line, phoning up and just turning up. Also in the latter two cases you have to establish at the outset you want the price for fitting including valves and balancing and it includes VAT or you may find additional charges when it comes to pay.

[tim...]

well yes

but then he doesn't have any VAT to "pocket" does he

so the scenario must be a VAT registered trader.

I know that you think that it might work like that

I can assure you that it doesn't always

Having to add VAT to VAT is a perfectly normal requirement of some transactions

BTDTGTTS

tim

[tim...]

so he's committed a fraud by adding 20% VAT onto his invoice

simples

[tim...]

only if the item is a disbursement

if it isn't, then VAT should be charged on top of the VAT-added price

To be fair, this item should be a disbursement and if the supplier treated it otherwise then that is a mistake

But it's a mistake that will result in too much VAT being passed onto HMRC, not cash into the pocket of the trader, as the PP claimed

I can only answer the point as posted, not some other scenario that might have happened, but didn't

In any case it seems that the scenario was that a non VAT registered trader was adding VAT. so that is just plain fraudulent and not an accounting blip

tim

[spuorgelgoog]

Given I had an ebay coupon to use, it was basically free.

Owain

[Theo]

Does anyone ever not want valves and balancing?

Theo

[Chris Green]

Well I ran a VAT registered business for 25 years or so and never had to do it.

[williamwright]

If he writes "+20% VAT" he's committed a crime. If he writes "+ 20%" he hasn't done anything wrong.

He could make up his invoice as follows and it would be legal, as long as the materials were VATable at 20%:

Price of materials before VAT: £xx

20% VAT on above: £xx Labour etc: £xx Total: £xx

That's because he wouldn't be charging VAT on his gross profit, only recouping the VAT he'd paid for the materials.

Incidentally I registered for VAT when it first came out in 1973. I had two VAT inspections in the following forty years. At the first one they discovered that we'd mistakenly claimed back the VAT on three quid's worth of postage stamps, so we had to fill a lot of forms in and repay

30p. We were made to feel like the very worst sort of criminal. At the second inspection the chap couldn't find anything, but on his way out he looked at my children's treehouse and said, "You need planning permission for that!"

Bill

[williamwright]

My call-out was £70 + VAT and that was seven years ago.

Bill

[williamwright]

The fact that the big players were in fierce competition meant that there was little to chose between them, but most people stuck to one or the other brand for the sake of familiarity, because they liked to use a particular wholesaler who sold one but not the other, being mates with the rep, etc etc.

Actually, when a lot of us told the reps of firm A that we were changing to firm B because A was selling to the sheds at lower prices than they'd give us, there was quite a kerfuffle in the trade. I remember several of us at firm A's stand at a show really giving them a piece of our minds.

Firm A made some pointless cosmetic changes to the products they sold to the sheds and removed their branding, but it obviously didn't work because it wasn't ling before the sheds changed to a different, foreign, brand. That was fun because the channel groups were different! After that they started to sell wideband only.

Not, nothing a competent DIYer could do. Luckily a lot weren't competent. Oh how we laughed.

Bill

[williamwright]

I was in an animal food supplier's recently and they had a big notice that said, "Internet prices are for internet sales only." In other words, it was dearer to buy from the shop.

Bill

[No Name]

Yes because the running costs of a High street "Bricks & Mortar" outlet in a town/city are much higher than a warehouse out in the countryside.

Coincidentally, a "Dropshipper" has even lower costs than a warehouse and can often operate out of a single office with suitable IT.

Several well known internet brands are really Dropshippers in disguise.

For instance I ordered 4 items recently from one Single well known website.

The items all came in 4 different parcels on 4 different days from 4 different warehouses.

I only had to pay 1 set of P&P, not 4 sets of P&P...

[Dave Plowman (News]

That's one way to make sure the shop will close, sooner or later.

It's more understandable with a high street shop.

But the likes of ECP are basically a warehouse with a counter. And usually busy. And given Ebay sales include free delivery, I'd love to see a true breakdown of costs.

[williamwright]

Actually this is a warehouse on an industrial estate. They allow people to go in and pick stuff up, and they have a till. When you appear at the till one of the lads gets off his fork lift and comes to take your dosh (sometimes a girl appears to do it). It is very rough and ready (especially the lass). There are several supermarket trolleys outside for customers to use, and the threshold at the one entrance they let us use is really difficult to get the trolley across. It isn't very inviting, really!

Bill

[charles]

Not as bad as the radiator valve warehouse I went to a few years ago. "We're only allowed to take credit card details over the phone." So, I had to go into another room where I was rung up and able to give my credit card details.

[John Rumm]

I think its the other way around. For general goods sold on, you reclaim and charge VAT in the normal way. These are not disbursements.

A disbursement is when goods pass from supplier direct to customer, but you make payment on their behalf. You are simply acting as an agent for the customer and never "own" the goods at any point. This allows you to not have to account for VAT on them (both reclaimed and charged).

There are only really two cases where its worth using a disbursement: One is where the original supplied item was zero rated, and you are VAT registered but the customer is not. Hence you would otherwise have to add VAT that the customer can't reclaim. The other (probably more useful) one is for non VAT registered businesses that are attempting to stay under the mandatory VAT registration threshold, since disbursements are not counted towards turnover. So matey can buy materials for a job and in effect just act as an agent for the customer (not worth doing IMHO since its going to cost you time and liquidity to do, and if the materials are defective the hassle is still likely to land at your feet regardless!)

No see above.

I think what you are thinking about is a "VAT recharge" - this is where you buy something that is notionally an expense that you expect the customer to pay, but you actually take ownership of or use it yourself. When making recharges, you have to charge VAT on them regardless of whether it was zero rated or not when you paid for it. A classic example might be postage. Its zero rated, so you can't claim VAT back, but if you invoice the customer for the postage, then you must charge VAT. Same might apply to some travelling expenses.

Its not the task of a supplier to judge if something is a disbursement.

Indeed.

[Dave Plowman (News]

Some years ago, decided to send a parcel by CityLink as they had a depot opposite work. Save making a special journey. They wouldn't accept cash or a credit card. Cheques or account only. No wonder they failed.

[michael adams]

The BBC filmed a documentary about them in 2014. Part of it was in their new distribultion centre, massive place not yet opened, all conveyor belts going everywhere. The guy showing them around was so proud of it and couldn't wait to get started. And then on Christmas Eve that year they called in the adminsistrators

michael adams

...