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VAT receipts for new builds?

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  • 25-03-2013 10:02pm
    #1
    fairky
    Registered Users Posts: 16 ✭


    Can I ask if anyone has done a self Build and after the Build is completed received a letter from the Revenue re VAT and receipts ?


«13

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    #2
    kkelliher
    Moderators, Home & Garden Moderators Posts: 1,583 Mod ✭✭✭✭kkelliher


    fairky wrote: »
    Can I ask if anyone has done a self Build and after the Build is completed received a letter from the Revenue re VAT and receipts ?

    If they were to go down this route it would make for interesting review on how the cost of building was to suddenly jump.....


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    #3
    fairky
    Registered Users Posts: 16 ✭fairky


    Its just my brother built a house in 2008 and after completing his build got a letter from the revenue asking about VAT and to produce receipts has anyone else heard of anyone that has got one of these letters


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    #4
    fclauson
    Registered Users Posts: 1,691 ✭✭✭fclauson


    north or south of the border ?


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    #5
    ShiverinEskimo
    Hosted Moderators Posts: 18,115 ✭✭✭✭ShiverinEskimo


    They do spot checks and the unofficial word is they generally target direct-labour self-builds when there is the most chance of cash-in-hand work being done.

    My engineer is pretty particular about me getting VAT receipts from anyone because they are cracking down apparently due to the recession. And I'm using a contractor.


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    #6
    ECO_Mental
    Registered Users Posts: 2,477 ✭✭✭ECO_Mental


    fairky wrote: »
    Its just my brother built a house in 2008 and after completing his build got a letter from the revenue asking about VAT and to produce receipts has anyone else heard of anyone that has got one of these letters

    I'd believe that... the revenue are ruthless these days and there's nothing they would do that would surprise me if they got a sniff of of some cash back.

    My attitude is pay your tax no matter how it hurts they will catch up with you in the end and they do they will double down on yo a** when they do.

    Friends of mine who were self employed (in the pharma/IT sector atm) or were up to a couple of years ago are being put through the mill atm for claiming mileage traveling to and from their place of work. They are being caught for between some figures I hear of €50-70k with interest and penalties added. These are one man show operations and now out of work more than likely as well.

    So be careful

    6.1kWp south facing, South of Cork City



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    #7
    john_cappa
    Registered Users Posts: 1,371 ✭✭✭john_cappa


    If you are given a price for work then that is the price? is it not the responsibility of the tradesman to give 13.5% up?


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    #8
    muffler
    Registered Users Posts: 45,824 ✭✭✭✭muffler


    A few posts above moved from the Prices/costs forum.


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    #9
    hexosan
    Registered Users Posts: 1,735 ✭✭✭hexosan


    So is it then the responsibility of the self builder to make sure the trade you employ is tax compliant. I would of assumed that if you were priced say 10k by a block layer it would be his responsibility to pay his VAT contribution from this amount.


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    #10
    sydthebeat
    Subscribers Posts: 41,028 ✭✭✭✭sydthebeat


    john_cappa wrote: »
    If you are given a price for work then that is the price? is it not the responsibility of the tradesman to give 13.5% up?

    NOPE !!!

    http://www.revenue.ie/en/tax/rct/


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    #11
    sydthebeat
    Subscribers Posts: 41,028 ✭✭✭✭sydthebeat


    hexosan wrote: »
    So is it then the responsibility of the self builder to make sure the trade you employ is tax compliant. I would of assumed that if you were priced say 10k by a block layer it would be his responsibility to pay his VAT contribution from this amount.


    again, nope..... thats a dangerous assumption to make

    http://www.revenue.ie/en/tax/rct/


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    #12
    tedimc
    Registered Users Posts: 619 ✭✭✭tedimc


    Does the word 'Contractor' not exclude the general self-builder, who I presume is PAYE?

    If RCT applies, then I would have thought anybody getting even small works done on the home would be in this bucket - bathroom re-tiled, room painted, even the bloody lawns cut!!


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    #13
    sydthebeat
    Subscribers Posts: 41,028 ✭✭✭✭sydthebeat


    tedimc wrote: »
    Does the word 'Contractor' not exclude the general self-builder, who I presume is PAYE?

    If RCT applies, then I would have thought anybody getting even small works done on the home would be in this bucket - bathroom re-tiled, room painted, even the bloody lawns cut!!

    as far as i know, the definition of a direct labour build in revenue terms means the self builder becomes the PRINCIPLE CONTRACTOR and liable for these taxes.

    im not an expert and you should get clarification from revenue on this, but thats what i understand.

    obviously the whole idea from revenue is that NO black market 'nixers' occur, so yes, if payment is received for labour given then a tax is liable.

    Where self builders are hit is that, when there is a mortgage, there a clear and obvious "out goings" of monies which should be validated.


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    #14
    tedimc
    Registered Users Posts: 619 ✭✭✭tedimc


    Good to know - I pay enough tax without getting screwed over because someone else isn't paying theirs!


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    #15
    sydthebeat
    Subscribers Posts: 41,028 ✭✭✭✭sydthebeat


    tedimc wrote: »
    Good to know - I pay enough tax without getting screwed over because someone else isn't paying theirs!

    if your hoping to do a "direct labour" build then the link above is vital reading.


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    #16
    woodoo
    Closed Accounts Posts: 5,219 ✭✭✭woodoo


    What happens if you kept no receipts for anything.


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    #17
    ShiverinEskimo
    Hosted Moderators Posts: 18,115 ✭✭✭✭ShiverinEskimo


    woodoo wrote: »
    What happens if you kept no receipts for anything.
    You get in heaps o trouble.


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    #18
    martinn123
    Registered Users Posts: 2,300 ✭✭✭martinn123


    The first point is if you are claiming Mortgage Relief for Tax purposes, if so, if you spend say 100K, you need receipts, including VAT

    Secondary, the links already posted, show the ''Self Builder'' is the Main Contractor, and responsible for the ''Tax'' due on the subbies payment, without a C2


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    #19
    wirehairmax
    Registered Users Posts: 678 ✭✭✭wirehairmax


    If indeed the Revenue are targeting self-builds, I would welcome it but they are about 5 years too late.
    I never understood why self-builders were not made to account for every cent of a mortgage. A mortgage of 2-300k is a decent turnover for a small business and it baffles me why direct labour builds are not subject to the same accounting and revenue practices as a business. There should be no cash paid from a mortgage and all transactions should either be by cheque or bank transfer and so be fully traceable. How do banks hand out that sort of money and not want a full set of accounts to show how it was spent?
    It would be great to see Revenue, HSA and Building Control take active interest in direct labour builds as what has been happening for the past few years has been unbelievable to say the least when it comes to the black market, lack of safety on sites and poor standards of work.


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    #20
    sas
    Registered Users Posts: 1,282 ✭✭✭sas


    Having been intrigued by this thread, I took a wander through the links and came across this:

    http://www.revenue.ie/en/about/foi/s16/income-tax-capital-gains-tax-corporation-tax/part-18/18-02-02.pdf?download=true

    Can someone please reference the section of this that makes a self builder a principal contractor for rct purposes?

    I'm no tax expert but I don't see how this could apply to self builders based on that link.


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    #21
    wirehairmax
    Registered Users Posts: 678 ✭✭✭wirehairmax


    sas wrote: »
    Having been intrigued by this thread, I took a wander through the links and came across this:

    http://www.revenue.ie/en/about/foi/s16/income-tax-capital-gains-tax-corporation-tax/part-18/18-02-02.pdf?download=true

    Can someone please reference the section of this that makes a self builder a principal contractor for rct purposes?

    I'm no tax expert but I don't see how this could apply to self builders based on that link.
    You're correct in what you are saying. Unless self-builders are made to register as a main contractor and RCT, they are under no obligation to be liable for RCT on a sub-contract. I think the initial post has been lost along the way. What I undestood in the OP was that Revenue wanted to see receipts and invoices from contractors and suppliers and that it is they who would be investigated for failing to issue receipts and not declaring payments.
    It would still be a good thing if Revenue were to pay more interest in this sector though.


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    #22
    wirehairmax
    Registered Users Posts: 678 ✭✭✭wirehairmax


    kkelliher wrote: »
    If they were to go down this route it would make for interesting review on how the cost of building was to suddenly jump.....

    Maybe then we'd get a true and actual cost of some of these miracle houses, which if you believe what you read around here sometimes, that seem to be built and paid for with magic beans.


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    #23
    daver123
    Banned (with Prison Access) Posts: 208 ✭✭daver123


    wirehairmax wrote: »
    Maybe then we'd get a true and actual cost of some of these miracle houses, which if you believe what you read around here sometimes, that seem to be built and paid for with magic beans.

    Get a contractor from the north of ireland to do the job and you dont have to pay vat


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    #24
    fairky
    Registered Users Posts: 16 ✭fairky


    But what if all your Trades are from Northern Ireland ? How can the Irish Revenue pursue these ?


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    #25
    fclauson
    Registered Users Posts: 1,691 ✭✭✭fclauson


    daver123 wrote: »
    Get a contractor from the north of ireland to do the job and you dont have to pay vat

    Not true
    fairky wrote: »
    But what if all your Trades are from Northern Ireland ? How can the Irish Revenue pursue these ?

    called cross EU data sharing


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    #26
    kkelliher
    Moderators, Home & Garden Moderators Posts: 1,583 Mod ✭✭✭✭kkelliher


    daver123 wrote: »
    Get a contractor from the north of ireland to do the job and you dont have to pay vat

    I dont think that is technically correct. If the contractor exceeds the threshold of work in the south would he not be required to register for vat in the south?


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    #27
    Villain
    Registered Users Posts: 15,944 ✭✭✭✭Villain


    A self build house is no Different to any expenditure a person makes, i.e. someone paying a person to clean their windows or cut their grass the quantity of work makes no difference. I had this argument with an accountant when I started building, he eventually agreed there is no difference.

    The process for stage payment certs is an Engineer with the required qualifications says the work to that value has been completed, that is accepted by the Bank.


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    #28
    hexosan
    Registered Users Posts: 1,735 ✭✭✭hexosan


    Can anyone answer this

    1. So how long is a self builder required to keep receipts if revenue decide carry out an audit.

    2. If a friend in the construction game carries out a trade and doesn't charge for the labour how does this work.

    Thanks


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    #29
    fclauson
    Registered Users Posts: 1,691 ✭✭✭fclauson


    hexosan wrote: »
    Can anyone answer this

    1. So how long is a self builder required to keep receipts if revenue decide carry out an audit.

    7 years is the norm - same as you tax return


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    #30
    ShiverinEskimo
    Hosted Moderators Posts: 18,115 ✭✭✭✭ShiverinEskimo


    hexosan wrote: »
    2. If a friend in the construction game carries out a trade and doesn't charge for the labour how does this work.

    Thanks

    13.5% of €0.00 is €0.00.


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    #31
    sas
    Registered Users Posts: 1,282 ✭✭✭sas


    fclauson wrote: »
    7 years is the norm - same as you tax return

    Where is this coming from?

    The link I posted above in my opinion clearly rules out the conclusion reached here that the "self builder" is the "principal contractor" in the vast majority of cases.


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