WDF

Thanks as always everyone for your wise words. Yes she definitely needs help on the finances! The invoices for the goods are separate from the project management invoices so she should be zero rating them. I think she is trying to protect her cash flow which is understandable. If she told me that I would understand and accommodate but she is saying she can't zero rate supplies to me.... frustrating as I will have to go through the painful task of reclaiming at the end of the project.

Related to this thread but just want to double check.... our project manager (on a new build) is sourcing supply items such as sanitary ware and windows from third parties on our behalf but saying we have to claim back the VAT at the end of the project and only the prime contractor can zero rate goods. She is presumably paying VAT on the goods to the suppliers,, should she then zero rate them when selling them onto us? She says she can't do that but I suspect its because she doesnt want to effect her cash flow while waiting for her VAT return. If that's the case I wouldn't mind her saying that is the reason but she is insisting its not legal.

Thank you JSH that is very useful. WDF

They have been invoicing us without VAT until April and have stalled since then. They now want to put a correction in with HMRC. The build is all but finished so I don't necessarily need control over the PM any more. All is good with the PM and the builder and all parties are very happy. Its just a balls up with the VAT and the inexperience of the PM on VAT issues. If PM issues a credit note for the invoices presented to date and then invoices the builder instead (with VAT) he could pay her invoices. I could write a hold harmless letter to the builder freeing them of any liability for her work. Once again, thanks for your expertise and time on this. WDF

The JCT contract is between me and the builder. Should I get the PM to issue a credit note for the work she has done and get her to put an invoice into the builder, if I can get all parties to agree.

Thank you Peter and Ferdinand. Peter, just a follow up question, does the type of contract matter. In principle could my builder have contracted the Project Manager even on a cost plus contract. Many thanks WDF

Hello experts! A question on project management and VAT. I am 90% through a new build house and have engaged a project manager as I am working abroad. We initially were looking at a Design and build contract with a main contractor overseen by our project manager. On the PM’s advice we understood we would not be liable to VAT on her fees. Having received tenders from a number of builders we went with a JCT prime cost plus contract. 12 months into the 18 month project our PM announces that because we had moved from a Design and Build contract to a cost plus then she had to charge VAT on all her fees. Is this correct? Why can you zero rate VAT for PM fees on a design and build contract and not on a cost plus contract. Any advice would be most welcome. Thanks WDF