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Small bill not zero rated


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Hi all, 

 

Finishing a new build house and one tradesmen is unwilling at the moment to zero rate his work, it's only £14 in VAT but I feel why should I throw the money away?  He was good and came out quickly but still argh!

 

What would you do?  

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I have paid the net as I didn't want to hold it up. Electrician.

 

The reason *I think* is because he paid vat on some material which obviously makes no difference as he can still reclaim.

Edited by Water
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12 minutes ago, nod said:

A lot of companies Especially smaller ones won’t zero rate 

Just put it in your reclaim 

But if hmrc actually read your VAT claim, they will reject that, and instruct you to go and get the VAT back from the contractor.

 

We had that on first build for some ground work, only the contractor had croaked before we finish and I did not have the heart to try chasing his widow for the VAT.

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Try offering him a certificate. I think officially they are only needed for work on a charity building but they have helped in the past. There is an example on the VAT 708 in section 18.

 

https://www.gov.uk/guidance/buildings-and-construction-vat-notice-708#section17

 

https://www.gov.uk/guidance/buildings-and-construction-vat-notice-708#section18

 

Will need editing. 

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Is he vat registered? If not, my understanding from reading the HMRC notes is that you can still reclaim it as he would have paid the vat on the materials.

I have a similar situation with my kitchen fitter who buys the cabinets and doors with vat added but he is not vat registered. I will be reclaiming the vat even though it is not separated on his invoice to me. 

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4 minutes ago, Water said:

 

and if the invoice is in his name they will probably reject it.

The invoice will be in my name as it is the kitchen fitter's invoice to me.

 

@saveasteading this is covered in section E on the reclaim form and no mention of needing the fitter's invoice from his supplier. Presumably HMRC could follow it up if they wish to with the fitter which is a limited company with proper accounting but that's not down to me. 

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40 minutes ago, shuff27 said:

Is he vat registered? If not, my understanding from reading the HMRC notes is that you can still reclaim it as he would have paid the vat on the materials.

I have a similar situation with my kitchen fitter who buys the cabinets and doors with vat added but he is not vat registered. I will be reclaiming the vat even though it is not separated on his invoice to me. 

 

But he wouldnt have charged you vat so you can't reclaim what hasnt been charged.

 

If he paid for some materials in say screwfix and just had a till receipt which he gave you then maybe 

Edited by Water
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15 minutes ago, shuff27 said:

The invoice will be in my name as it is the kitchen fitter's invoice to me.

 

@saveasteading this is covered in section E on the reclaim form and no mention of needing the fitter's invoice from his supplier. Presumably HMRC could follow it up if they wish to with the fitter which is a limited company with proper accounting but that's not down to me. 

 

The notes on section E of the reclaim form say this:

 

Screenshot_20220810-190124.png.80b525548c14e53d214689d59794f863.png

 

Note the comment "You should check that the invoice has the name and VAT registration number of the trader who has supplied you with the building materials.)"

 

In other words section E is for things like the retail scheme where you have bought from a VAT-registered trader who has provided a simplified retail receipt which shows their details inc VAT number but not an actual breakdown/amount of VAT charged.

 

If you are buying from a non-VAT-registered trader then even if they paid VAT on the stuff they bought, and even if that is included in the price they charge you, it is not "VAT" when you pay it and it cannot be reclaimed by you.

 

That's a basic principle of VAT accounting and as far as I know there is no special exemption for that on the self-build scheme although I am not an expert.

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3 hours ago, ProDave said:

But if hmrc actually read your VAT claim, they will reject that, and instruct you to go and get the VAT back from the contractor.

 

We had that on first build for some ground work, only the contractor had croaked before we finish and I did not have the heart to try chasing his widow for the VAT.

They didn’t bother with us 

We found a company that would supply and fit the block and beam floor for the price that I could buy the materials 

They wouldn’t zero rate 

Just put block and beam supply 

We claimed the vat back without any issues 

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