Tradesman charging VAT on a cheque.

Drax

I had some work done by an electrician. When I went to pay him I asked him if he took a cheque. He then told me that if he was to take a cheque then he would have to charge me VAT on this. I've paid him for half the job now in cash (I dont want to pay an extra 21%) but it sounds to me like a bit of a con. I know a lot of tradespeople like cash only but I am tempted to ask him about this. Any info appreciated.

Tipsy Mac

Drax wrote: »

I had some work done by an electrician. When I went to pay him I asked him if he took a cheque. He then told me that if he was to take a cheque then he would have to charge me VAT on this. I've paid him for half the job now in cash (I dont want to pay an extra 21%) but it sounds to me like a bit of a con. I know a lot of tradespeople like cash only but I am tempted to ask him about this. Any info appreciated.

Sounds like he is trying to dodge the taxman. If he was "charging" VAT then the rate should be 13.5% as it's a service he is offering and not luxury goods. He should be charging VAT anyway whether you pay him in cash, cheque or whatever.

KhanTheMan

Tipsy Mac wrote: »

Sounds like he is trying to dodge the taxman. If he was "charging" VAT then the rate should be 13.5% as it's a service he is offering and not luxury goods. He should be charging VAT anyway whether you pay him in cash, cheque or whatever.

Ask him if he's sure about that. Tell you'll ring the tax office with him there to find out he rate

People should stop paying builders up front now. Only pay for work done satisfactorily to the stage you are paying at.
Its a clients market now. People just have to put their foot down.

Steve

Just pay him the agreed amount by cheque, the VAT issue is his problem.
You are a consumer so afaik by law the price quoted must include tax. If he costed the job with dodging VAT in mind then it's his problem.

Did he made it clear to begin with that the price was based on nod nod wink wink cash?

Guy:Incognito

KhanTheMan wrote: »

Ask him if he's sure about that. Tell you'll ring the tax office with him there to find out he rate
.

From the OP I got that the guy just said he'd have to charge vat, the op decided the rate would be 21%.

Why do people get all uppety when someone is clearly doing something as a nixer but also whinge if the price is too high when they arent? It cant work both ways, if it goes on the books, vat is charged. Cheques are traceable, so he has to cover himself by paying vat.

Stuxnet

ya i'm a chippie thats way it works cash is good
cheque bad, has to go through the books, so you add the vat
i'm sure if you can pay the balance in cash you wont have to pony the difference

Sponge Bob

The basic rule is that you always quote including VAT for a consumer Bobby

You quote ex VAT to the trade who can claim VAT back .

Them's the rules . If a consumer challenges you on the VAT bit you never quoted for then it is tough **** mate ....at least it is only 13.5% tough sh1t not 21.5% .

Thomas_S_Hunterson

BOBBY wrote: »

ya i'm a chippie thats way it works cash is good
cheque bad, has to go through the books, so you add the vat
i'm sure if you can pay the balance in cash you wont have to pony the difference

You areYour post is a gob****e

dudara

Sean K

Stay civil please. BOBBY was just stating his thoughts as a tradesman.

dudara

mikemac

Been in this situation.
Tradesmen did a good job and I handed over a bank draft.
"Sorry bud, if you're not paying cash then I'm adding VAT on your bill. Your final bill just went up"
My argument that I'm only a customer and the quote must include VAT didn't work.

But whipping out the golden pages and offering to ring the Revenue on speakerphone to find out did work.

So there you have it folks. Call the helpful people in the Revenue with the tradesman there and these issues solve themselves.

And ALWAYS get a receipt. It's might be the only comeback you have if the work is shoddy.
Never, ever accept an offer for the tradesman to post a receipt later in the week.

D

Most builders will make it clear about the cash "discount" when they are pricing. If he didn't then he should have. If you really want to screw him over, offer to ring the revenue as has been suggested. Just don't expect him to offer to do any more jobs for you (or any of his associates that he can tell about it).

Builders aren't the only ones with cash discounts, electrical outlets and car salesmen also offer cash discounts.

jhegarty

D wrote: »

Builders aren't the only ones with cash discounts, electrical outlets and car salesmen also offer cash discounts.

Builders do it for vat fraud , electrical outlets mean cash instead of credit and car dealers mean cash instead of trade-in....


to the op , ring the revenue and ask them what to do.... make sure you give this cowboys name and address to them , if he doesn't pay vat he also doesn't pay income tax and may be claiming the dole as well...

cormie

He wouldn't be charging VAT if he wasn't vat registered, which would mean he'd have to be paying some VAT and wouldn't be on the dole. The service is 13.5% but the goods he buys for the job will be at 21%. Did he actually say 21% for the full job or did you just think that's what you were going to have to pay on top? It's only 13.5% for the service he's provided anyway

mikemac

21.5% now

cormie

Not till Dec 1st

MysticalSoul

You can make the cheque payable to "Cash", or has that been gotten rid of now.

Climate Expert

Write him a cheque. Tell him to take you to court if he has a problem with it as it was the quoted amount.

cormie

Can't he outright refuse a cheque as a method of payment anyway? I'm sure you can come to some agreement without having to start mentioning courts and legal action and all that.

jhegarty

cormie wrote: »

Can't he outright refuse a cheque as a method of payment anyway? I'm sure you can come to some agreement without having to start mentioning courts and legal action and all that.

the only way for him to enforce anything is through the courts, which he can't do because he is proposing an illegal contract...

ejmaztec

cormie wrote: »

He wouldn't be charging VAT if he wasn't vat registered, which would mean he'd have to be paying some VAT and wouldn't be on the dole. The service is 13.5% but the goods he buys for the job will be at 21%. Did he actually say 21% for the full job or did you just think that's what you were going to have to pay on top? It's only 13.5% for the service he's provided anyway

Some people do pretend that they're registered for vat - just to get that bit extra. I've seen this many times, both here and in the UK.


You can always use the following link to prove that a vat number is valid.

http://ec.europa.eu/taxation_customs/vies/vieshome.do?selectedLanguage=EN

cormie

They could indeed. All vat invoices should include the VAT number so you could indeed check that site while you "go off for my chequebook".

Mine is valid, whoo :pac:

Stuxnet

Sean_K wrote: »

You areYour post is a gob****e

your post isn't very helpful, i was just stating an opinion
if somebody wants me to hang a door, do you think i am going to charge them vat, on a door,
its just the way its done, weather its right or not is a different argument

Steve

BOBBY wrote: »

if somebody wants me to hang a door, do you think i am going to charge them vat, on a door,

Why wouldn't you??? You pay VAT when you buy the door.

If you're reclaiming because you're VAT registered then revenue will eventually spot this in your returns.

Thomas_S_Hunterson

BOBBY wrote: »

your post isn't very helpful, i was just stating an opinion
if somebody wants me to hang a door, do you think i am going to charge them vat, on a door,
its just the way its done, weather its right or not is a different argument

It's tax evasion.

ejmaztec

BOBBY wrote: »

your post isn't very helpful, i was just stating an opinion
if somebody wants me to hang a door, do you think i am going to charge them vat, on a door,
its just the way its done, weather its right or not is a different argument

There's no argument - it's illegal. :rolleyes:

ejmaztec

Hey Bobby, should the Revenue Commissioners be successful after searching Ennis, there'll be more than a door hanging. :eek:

BenjAii

Although it's clear that the person dealing with the original poster was being dodgy, not all self-employed people have to charge VAT.

http://www.accountingnet.ie/channels/budget_2007/budget_summary.php

I don't know if the limit was increased in this budget, but as of 2007 a small business has to have a turnover of over 35k before it needs to start charging VAT.

So there are instances when its perfectly legal and legitimate to not be charged VAT.

Steve

BenjAii wrote: »

Although it's clear that the person dealing with the original poster was being dodgy, not all self-employed people have to charge VAT.

http://www.accountingnet.ie/channels/budget_2007/budget_summary.php

I don't know if the limit was increased in this budget, but as of 2007 a small business has to have a turnover of over 35k before it needs to start charging VAT.

So there are instances when its perfectly legal and legitimate to not be charged VAT.

Do you know how VAT works?

If trading unregistered, you pay VAT on materials so by default when you charge the customer for them it includes VAT.

cormie

By the sounds of it, the electrician was referring to his charge when he mentioned the VAT, in which case, if he earned under the threshold, he wouldn't have to pay VAT unless he's VAT registered. But the fact he said he'd need to charge VAT on top would indicate he is VAT registered and just wanted a simple cash in hand nixer.

jhegarty

BOBBY wrote: »

your post isn't very helpful, i was just stating an opinion
if somebody wants me to hang a door, do you think i am going to charge them vat, on a door,
its just the way its done, weather its right or not is a different argument

I paid vat on a 7 cent item today, so yes you should change it on a door...

ejmaztec

We're all paying the price because the tax take is down, and we'd most certainly be paying less were every vat-registered business to play the game. I wonder how much all of this fiddling has cost us since vat was brought in 35 years ago.

The non-registered consumer ends up paying in extra taxation, the amount he thinks that he's saved paying vat-free cash.

311

Theres absolutely nothing wrong with paying with a cheque. It's not up to a customer to decide whether someone pays their taxes.

Thats just plain ridiculous.

BenjAii

SteveC wrote: »

Do you know how VAT works?

If trading unregistered, you pay VAT on materials so by default when you charge the customer for them it includes VAT.

I'm perfectly aware how VAT works.

Yes, if trading unregistered for VAT you are liable for any VAT costs you incur and cannot claim it back; it doesn't change the truth of what i said.

If your turnover is below 35k a small business/self-employed person does not have to charge VAT.

Steve

BenjAii wrote: »

I'm perfectly aware how VAT works.

Yes, if trading unregistered for VAT you are liable for any VAT costs you incur and cannot claim it back; it doesn't change the truth of what i said.

If your turnover is below 35k a small business/self-employed person does not have to charge VAT.

Fair enough, I wasn't having a go at you, I was just unsure.

joolsveer

BenjAii wrote: »

If your turnover is below 35k a small business/self-employed person does not have to charge VAT.

I think the law is that you can choose to register for VAT is your turnover is below the threshold. If you are not VAT registeered you cannot charge VAT.

dudara

OK all, this is the Consumer Issues forum, not the small business/tradesman forum, so please respect that.

dudara