Kitchen refurbishment and VAT

[VATquestion]

Hello

I have started getting quotes for my kitchen refurbishment - it’s over 20 years old and in dire need of replacing. It’s not a huge job but will take about 5 to 7 days.

The first person who came to quote today seemed to really know his stuff and was recommended on Next Door. He seemed very efficient, and understood everything I was asking for and what it would entail.

However I asked about VAT and he said it would be charged if I didn’t pay cash basically. He asked if I could pay cash and I said yes, not really thinking. I wasn’t necessarily agreeing to his VAT set up, but I hadn’t had any time to think about what he was saying.

In any case, I haven’t received his quote yet, but I am thinking I have to say I can pay by bank transfer, so to add the VAT, and I would like a proper invoice.

Because it doesn’t seem that he wants cash other than to avoid paying VAT, because otherwise he would have said he wasn’t registered?

Or should I just not go with him at all? What if all the others who quote say the same?

Minefield it seems .

Remember a guarantee of twenty years or whatever may sound fantastic but if the company goes bust you will get no guarantee!

Try an independent site with lots of feedback. Lots of good feedback suggests lots of happy customers. Happy customers recommend to their friends and business is booming. Less likely to go bust than shady John and the fly by nights company. (That should be the name if a band lol)!

you can't avoid the VAT the kitchen retailer will add so what you'd save by paying cash is the VAT on his labour

That was my thought at first too, but it's not necessarily true. A VAT-registered kitchen fitter buys a lot of kitchens - it would be easy enough to reclaim the VAT on the purchase but supply to a non-VAT paying customer.

There's then a double-benefit to the fitter. If he bought the kitchen "on-book" and reclaimed the VAT, he can also claim an income tax deduction, thus reducing his income tax on the official side of his business.

Generally, the tax man is not going to match up kitchen purchases with invoices to customers. But if he does it too often/much then they might get suspicious and investigate him. They know how much the average kitchen fitter earns and what tax he should be paying, within certain bands.

When asking for quotes, ask for the total amount you will have to pay, and tell them you will be paying by card or bank transfer. That way they know it isn't going to be a cash in hand job.

People who deliberately evade tax are in the same league as benefit fraudsters. They are both cheating a system from which they expect to benefit.

The VAT threshold is £85,000, so it is possible that someone who only fits and doesn't supply kitchens would be under it. In that case you'll probably have to order and pay for the kitchen and all other materials such as tiles and paint. I did that with my kitchen and it meant that if anything went wrong you'd have to work out whether the fault is with the kitchen supplier or the person who fitted it, so a bit more fiddly.

Thanks for all the messages, someone else has just come to look at the kitchen, and he is under the VAT threshold and takes bank transfers, so I feel much better now.

Haven’t seen his quote yet though so we will see...

You might want to keep in mind that tax evasion is a crime. People go to prison for it.

I'm amazed you'd even consider using someone so open about criminal activities.

Being charming in a thirty minute appointment to try and win work is hardly difficult or meaningful.

I'm amazed you'd even consider using someone so open about criminal activities.

I was trying to work out what’s what, and would not have asked the question here if I was going to go ahead and just use the person. Because there is the whole issue of people paying in cash but it not being fraud. It seems he is trying to tax evade however.

But thanks for the advice re bearing in mind that tax evasion is a crime.