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Vat Back on Materials

  • 24-09-2009 8:48am
    #1
    HobNob
    Registered Users, Registered Users 2 Posts: 51 ✭✭


    Hi,

    I've an arrangement with my blocklayer that he supplies all materials
    and I pay him for them. My question is though is he making money
    by claiming back the Vat on them. I also put in a raft foundation
    and a hollowcore concrete floor. so materials could come to 30K in
    total by the time we're finished. so if he claims back the 21.5% vat
    that's over 6k.

    is this correct ?


Comments

  • #2
    No6
    Registered Users, Registered Users 2 Posts: 2,489 ✭✭✭No6


    Is he VAT registered? and is he charging you VAT? If not I doubt it.


  • #3
    HobNob
    Registered Users, Registered Users 2 Posts: 51 ✭✭HobNob


    Yes he's Vat registered, and Yes he's charging me full price.
    I've gotten all the receipts and have paid him in full so far.
    I still have some outstanding stuff to pay for.

    I kinda half mentioned ti to him and he fobbed me off with stuff
    about talking to his accountant and said he has to pay 13.5%
    so the most he could let me off was maybe the 8% difference


  • #4
    ThePiedPiper
    Registered Users, Registered Users 2 Posts: 2,643 ✭✭✭ThePiedPiper


    HobNob wrote: »
    Yes he's Vat registered, and Yes he's charging me full price.
    I've gotten all the receipts and have paid him in full so far.
    I still have some outstanding stuff to pay for.

    I kinda half mentioned ti to him and he fobbed me off with stuff
    about talking to his accountant and said he has to pay 13.5%
    so the most he could let me off was maybe the 8% difference

    he seems to be legit from what you've said.. The VAT on many materials will be at 21.5% but the VAT he charges you is 13.5%. So effectively, your whole house is being charged at 13% regardless of what materials, labour, etc goes into it. His QS or pricing should be taking the costs of materials at the VAT exclusive price, then he should be adding 13,5% VAT after this
    If he gives you a discount of 8%, he'll be taking the hit of that himself.
    hope this clears it up a bit..


  • #5
    Naux
    Registered Users, Registered Users 2 Posts: 335 ✭✭Naux


    HobNob wrote: »
    Yes he's Vat registered, and Yes he's charging me full price.
    I've gotten all the receipts and have paid him in full so far.
    I still have some outstanding stuff to pay for.

    I kinda half mentioned ti to him and he fobbed me off with stuff
    about talking to his accountant and said he has to pay 13.5%
    so the most he could let me off was maybe the 8% difference

    Example:

    Scenario 1:You buy materials for €1,000.00 plus VAT @21.5% .....cost to you is €1,215.00 as you cannot claim back the VAT. You must then pay the builder €2,000.00 plus 13.5% VAT to do the job using the materials you bought.....cost to you is €2,270.00

    Total Cost of job is €1,215.00+€2,270.00=€3,485.00

    Scenario 2: Builder buys materials for €1,000.00 plus VAT ..... cost to him is €1,000.00 as he can claim back the VAT.

    The builder then charges you for the job :€3,000 plus VAT @ 13.5% which is €3,405.00

    Total cost of the job is €3405.00.......you save €80.00(8% of material cost)


    Of course for this to work the builder must be giving you the materials @ cost price.


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