No vat on invoice

undecided

Looking for some advice please.

Husband is sole trader builder. He required the specialist service of a company. It was not part of a job that he was doing it was for his own needs. Price was agreed and paid. But upon receipt of the invoice it stated principal will account for vat. Although he is registered for rct this was not what was discussed. Asked for a vat invoice and company are not forthcoming. How should this be treated in his books? Will he get in trouble for not paying vat on it? He doesn't believe it falls under rct. Thanks for reading

Calahonda52

Take it up with the Revenue, just set out the facts, assuming it is all kosher. Advise company that you are doing this

jimmynokia

Simply take the VAT into account and revert back to the person who sold their service, papertrails are not invisible..Assuming you paid the total amount that included VAT

Lockedout2

As your husband is registered for RCT then RCT applies to him personally as well.

So he should operate RCT on the payment but the subcontractor should charge him VAT.

thegolfer

Lockedout2 wrote: »

As your husband is registered for RCT then RCT applies to him personally as well.

So he should operate RCT on the payment but the subcontractor should charge him VAT.

You are correct about the operation of the RCT, though I would consider that no VAT is charged, as in this case the accountable person is the OP's husband.

Thus he should restrict his VAT input in his VAT Return, self-supply, ie pay the VAT himself.

undecided

Sorry I probably worded the op badly. The service was related to his business but was not a part of a job he was doing. It was not something for his personal needs. As I understand rct is only applied to subcontractor as part of a construction project?

Marcusm

undecided wrote: »

Sorry I probably worded the op badly. The service was related to his business but was not a part of a job he was doing. It was not something for his personal needs. As I understand rct is only applied to subcontractor as part of a construction project?

Is there a cross border element? If it was an Irish supplier, is it possible that they are under the turnover threshold and thus not registered for VAT?

undecided

No not is an Irish business and are registered for vat as have a number on their invoice

Heisenburg81

thegolfer wrote: »

You are correct about the operation of the RCT, though I would consider that no VAT is charged, as in this case the accountable person is the OP's husband.

Thus he should restrict his VAT input in his VAT Return, self-supply, ie pay the VAT himself.

How does it apply personally? If a private job surely they need to reissue the invoice with VAT issued to him as a B2C customer?

K.Flyer

My understanding is, that the VAT being "paid by the principal contractor" and RCT applies if the person hired (a subcontractor) is acting on behalf of or for the principal in a business related manner and is being paid through the company books.
If the husband has hired someone to fix something in his own house and paid them from his personal account, then that would not be an RCT situation and a standard vat invoice would be issued.

exaisle

OP has said "It was not something for his personal needs."

I wonder are we confusing Intra-EU services with RCT and whether OP is confusing accounting for VAT on an Intra Eu service and accounting for VAT on a Relevant Contract?

OP...is the VAT number on their invoice an Irish VAT number?

Lockedout2

RCT applies to builders even in personal situations

https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-18/18-02-02.pdf

There is an exemption for personal where the payment is less than €20,000.

undecided

undecided wrote: »

Looking for some advice please.

Husband is sole trader builder. He required the specialist service of a company. It was not part of a job that he was doing it was for his own needs. Price was agreed and paid. But upon receipt of the invoice it stated principal will account for vat. Although he is registered for rct this was not what was discussed. Asked for a vat invoice and company are not forthcoming. How should this be treated in his books? Will he get in trouble for not paying vat on it? He doesn't believe it falls under rct. Thanks for reading

Is your husband the principal contractor? If so he should self account for VAT on the next return. The transaction is VAT neutral so no cost to your husband.

undecided

Lockedout2 wrote:

RCT applies to builders even in personal situations

Thanks so much for this!