VAT question - is this 'double VAT"

[cakeorwine]

I know....exciting

A plumber purchased an item for me from their supplier and fitted it.

The item cost £80 ex VAT - so £96 inc VAT

The bill details the cost of materials as £96

Then the bill has VAT added to the cost of the materials as £19.20, making the overall cost of the materials as £115.20

But surely VAT has been paid - so why charge VAT again?

Shouldn't the cost of the material be £80 plus VAT

The VAT goes to the Government - and I know there is some calculation between how much VAT you pay and how much you receive so it all balances out

Any VAT experts out there?

Is he definitely Vat registered?

Most definitely. A big local company

That's my understanding.

So I just need to have that conversation and ask a few questions.

Hes charged you vat on the part
VAT on the labour

It's an itemised bill:

Labour £50 VAT £10
Part £96 VAT £19.29

Total £146 plus £29.29 VAT

(But the actual part is £80 ex VAT)

(and as I said, it's assuming there's no mark up)

Its a recharge not a disembursement I think, so he is doing things correctly.

Explained by HMRC here:

https://www.gov.uk/guidance/vat-costs-or-disbursements-passed-to-customers

Isn't that the same guidance someone else posted.

He will pay the vat to his supplier and claim it back as input tax on his vat return. Nil effect.

He is however entitled to mark up his materials. Most (profitable and sensible) businesses put a mark up on the materials they supply in order to cover their admin overheads, it's standard practice. Why would they sell you the parts at cost?

It's highly likely that he's marked up the part by 20% and then charged you VAT on the marked up amount. Perfectly correct.

You could have bought the part yourself for the plumber to use I suppose, although you would possibly pay more if the plumber has an account with his supplier and gets a discount.

I don't know why you're querying it with them tbh.

Do you query the cost of the parts when you have work done to your car for instance? The garage will definitely mark them up before itemising then on your invoice.

I don't know why you're querying it with them tbh

I am querying it as it's not the discussion I had with them when I asked them about this.

So it's a VAT question.

It's highly likely that he's marked up the part by 20% and then charged you VAT on the marked up amount. Perfectly correct

That's not what it looks like has happened.

But this is the conversation I am going to have next week

Did they quote you £80 plus vat for the part?

If so then yes definitely query that

Yes

So the issue is that they've charged you more than you originally agreed, the VAT is a red herring here then

Not really

They have supplied the part as agreed (they purchased it as agreed) which was £80 plus VAT

Then they charged me VAT on top of that part (VAT on £96 instead of VAT on £80)

They have to charge you VAT, the error if there is one is that they agreed to a pre-VAT cost of 80 but they have charged you 96

That's the question you need to ask, no need to complicate matters by bringing the VAT into it imo