VAT payment request

[Awwkward]

We had done work done on our house 18months ago. House is listed and the guys said the work was VAT exempt due to being listed. All good we paid our bill then recently they contact us to say they have been audited and the legislation they quoted us actually expired several years ago.
They are now chasing us for the VAT which so far I have refused to pay.
My thinking is that they are vat registered and should know the legislation regarding their work.

I would like them to come and do other work in the future so would rather not fall out with them if possible!

Have you seen this?

www.cla.org.uk/rural-policy-advice/legal-and-professional/heritage/how-pay-less-or-no-vat-work-heritage-mitigating-damage-government’s-2012-tax-raid-heritage

I agree it's poor form to ask you. A quote to a private individual is presumed to include any vat payable.

I wouldn't pay. The VAT is their responsibility, not yours and they should have factored this in when they billed you originally.

collaborate thank you I hadn't seen that despite extensive googling. Sadly none of it is relevant to our situation except that the exemption was abolished in 2012 which was what our tradesmen were working on.
girl I agree entirely but would love to avoid a big argement. I just need a piece of legal jargon that says they have no right to ask us to pay!

But they don't have "no right to ask you to pay" - its just extremely cheeky and bad form.

I'd say no and sack them off. I am self employed and charge vat on my invoices, to large financial companies. If I contacted one I'd worked for 4 years ago and said oh sorry I forgot to charge you vat they'd just laugh at me.

They are liable for the VAT, not you. If they didn't charge you VAT at the time, they should recalculate your invoice as being inc. VAT and pay a portion of the money you paid to the taxman. It has nothing to do with you. They don't have a leg to stand on legally, so don't pay.

I appreciate it might make things difficult for them, but if they don't understand the legal rules of their trade they shouldn't be in business. It's part of what you pay a professional for.

treats would they be allowed to do that if they are being audited? I presume they won't be able to amend any invoices now.

They should just pay the missing VAT from their other profits, apologise to the VATman and learn their lessons well.

www.accountingweb.co.uk/anyanswers/question/what-happens-when-vat-hasnt-been-charged-vat-registered-client

forums.contractoruk.com/accounting-legal/87308-client-does-not-want-pay-back-dated-vat-invoice.html

That is what the auditor would expect them to do. If they didn't charge VAT where VAT was due, they have to pay it.

Sorry - to answer your point. They wouldn't amend an invoice. They would credit the original invoice and raise a new one with services + VAT equalling the amount you paid, match your payment to the new invoice and then pay the VAT portion to the taxman in their next return.

Thank you so much that's really helpful

The law is all very nice but you have to consider how much the goodwill is worth to you. If you are going to get them to do more work for you, presumably because you thought they did a good job then not paying the extra will probably mean looking for a new builder.

If they messed up the VAT, what else have/will they mess up ?

cdtaylornats - I would assume that it would be more in the builder's interest to remain on good terms with the OP and not hassle her for this payment, than in the OP's interests to remain on good terms with him. I would want to look for a new builder anyway as they clearly aren't as clued-up as they ought to be.

Goodwill might extend to £50, not over £1000! This is a local company who I would say have more to loose in reputation than I do.