Agricultural Contractor

[willbish]

The chap I have lined up to demolish the last of the cottage is questioning whether he can zero-rate the work because he is an agricultural contractor and not a builder.

 

I've read the rulebook (again!) and cant find anything that would mean he cant zero-rate.

 

Does anybody have any experience of this?

 

Thanks

[vivienz]

Surely it is classed according to the work he is doing rather than whatever he does in the rest of his time?

Otherwise, builders and the like would argue that they can't zero rate because they normally do work rated at 20%.

Edited April 7, 2018 by vivienz

[Dreadnaught]

I do not have direct experience of this but I do have experience running a VAT-registered business. I agree with @vivienz, whether he is a builder or not is irrelevant in my opinion. What matters is whether the party you are contracting with for the work (in this case your agricultural worker I assume) is VAT registered and how the work itself is rated (in this case zero rated).

[HerbJ]

+1 to @vivienz

[CC45]

I'd be worried about his insurance policy - does it cover what he's about to do?

[Dreadnaught]

1 hour ago, CC45 said:

I'd be worried about his insurance policy - does it cover what he's about to do?

 

Good point; both (personal and public) liability and (professional) indemnity insurances. I come from my business context but do not know how insurance works in either the agricultural or building sectors.

[Temp]

Just for info the relevant section isa vat notice 708 section 3.3.4

https://www.gov.uk/government/publications/vat-notice-708-buildings-and-construction/vat-notice-708-buildings-and-construction

[willbish]

Thanks for the advice. 

 

I wasn't able to convince this guy to do the correct thing and zero rate the work. 

 

He tells me he has had complications with zero rating work in the past and that I should just reclaim the Vat instead. ?

 

So unfortunately Ive had to look for someone else. 

 

 

[vivienz]

Bad luck, Will. Better to find out at the start if someone is going to be difficult.

[willbish]

Yeh this is true @vivienz I did consider taking the approach of @newhome and getting him to do the work but paying the invoice ex vat but I think these sort of games might do me no favours in the long run.

 

He's friends with a good chippy I'd like to use for other work, i don't want a dodgy rep for not paying. It's hard enough getting quality trades as is!

[newhome]

21 minutes ago, willbish said:

Yeh this is true @vivienz I did consider taking the approach of @newhome and getting him to do the work but paying the invoice ex vat but I think these sort of games might do me no favours in the long run.

 

He's friends with a good chippy I'd like to use for other work, i don't want a dodgy rep for not paying. It's hard enough getting quality trades as is!

 

The guy who we paid ex vat was the guy who supplied and poured the screed. He came from a long distance away and wasn't friends with anyone local so no risk to us on that score, but I totally get what you mean. We walked away from a few too as it seemed like far too much hassle ultimately. 

 

 

Edited April 10, 2018 by newhome

[willbish]

Tax doesn't have to be taxing!

 

But it is, and needlessly causing trades to lose work. Seems a shame after agreeing scope and price of work for the deal to crumble just because one party doesn't understand their tax obligations.