Payment of VAT to Tradesmen via Bank Transfer

Shaydawg

I recently paid an electrician (fully regd) for work carried out on house. Payment was made via electronic fund transfer to his bank account (unknown if personal or company a/c). I am finalising accounts for work done on house and was advised by a friend that some such payments might be VAT exempt?

I'm wondering does anybody know anything about these VAT rules? No physical receipt was given, just a credit transfer to his bank account. The vat is around 550 euro. Thoughts and views would be appreciated!!

Ten Pin

Have you an invoice with a breakdown of net and VAT amounts with the electricians VAT number?

scwazrh

are you vat registered and able to claim vat back or is for HRI ?

CeilingFly

I guess your friend is thinking of the hri vat refund scheme as I can't see where any electrical work could be vat free.

Here is the detail of the hri
https://www.revenue.ie/en/property/home-renovation-incentive/hri-for-homeowners-and-landlords/index.aspx

As for bank account, it would make no difference as if it's a sole trader all income is linked. Only if physical cash was given would there be any potential issues

Shaydawg

Ten Pin wrote: »

Have you an invoice with a breakdown of net and VAT amounts with the electricians VAT number?

I have a quotation with full breakdown of work and costing including VAT. I don't have a physical receipt nor his vat number for this work. House is new build, this transaction relates to additional work on the house, "extras" as he described them.

Shaydawg

scwazrh wrote: »

are you vat registered and able to claim vat back or is for HRI ?

No not vat registered and house is new build so am sure does not qualify for hri. Work paid for was for extra features.

CeilingFly

Shaydawg wrote: »

I have a quotation with full breakdown of work and costing including VAT. I don't have a physical receipt nor his vat number for this work. House is new build, this transaction relates to additional work on the house, "extras" as he described them.

If it's a new build then hri won't apply and there's no other refund or vat exemption out there for electrical work.

Your quotation matched with payment record suffices as a receipt.

You could a ask for an invoice to keep records of all costs.

Sleeper12

The work won't be vat exempt.

There are schemes where if you spend over 4 or 5 thousand in a year on home improvements you can off set the vat against future income tax. You must inform the tradesman prior to work's starting as he does not have to take part in the scheme if he doesn't want to.

You are always entitled to a vat receipt. He must provide you with a copy if requested. Tbh he should have given it to you when you paid. If I don't physically hand a client a receipt I will email them a copy after the bank transfer

Shaydawg

CeilingFly wrote: »

If it's a new build then hri won't apply and there's no other refund or vat exemption out there for electrical work.

Your quotation matched with payment record suffices as a receipt.

You could a ask for an invoice to keep records of all costs.

I think thats what I will have to do, I'm just not sure of rules on VAT on services.. but was advised to check out this particular transaction, especially if there is a saving to be made!

scwazrh

Shaydawg wrote: »

I think thats what I will have to do, I'm just not sure of rules on VAT on services.. but was advised to check out this particular transaction, especially if there is a saving to be made!

As others have said you are entitled to a vat receipt but it is of no benefit to you in this instance . There’s no saving to be made by having the vat invoice.

WildCardDoW

So when working with trader's you should typically expect the following:

quotation for work
invoice for work

I'm not sure if the quoatation would have the VAT number printed on it (it could) but the invoice typically would, but I'm not sure if it's a requirement. Quite a few trader's design their quotation / invoices in Word or Excel but other's will use accounting software which keeps track of invoices for the year, purchases for the year etc. (makes doing their tax a crapload easier) and accounting software will usually have the VAT number on it (I guess they could not supply the number to the software), otherwise it's up to the trader to put it on somewhere.

You can ask him fo rth VAT number but if you don't know why you should get the VAT back why do you care?

Also a trader, especially a sole trader, could have a combined account (i.e. personal account used for business) but that would not be reccomended (harder to track payments and work related expenses!).

Sleeper12

Just to be clear. It's NOT a vat invoice if his vat n is not on it. Does not matter if he appears to charge vat. No vat number means not a vat invoice

WildCardDoW

Sleeper12 wrote: »

Just to be clear. It's NOT a vat invoice if his vat n is not on it. Does not matter if he appears to charge vat. No vat number means not a vat invoice

Well, there ya go, VAT number required on invoice (for it to be legit!)

the_pen_turner

you dont have to give an invoice if the customer doesnt want one. not sure do you have to offer it .

all you can do is ask for it. its not a big deal. if the money was transfered then it will be diclared (only a fool wouldnt because it would show up on statments) its only a bit of paperwork