Which is correct? Query over VAT with builder

[Kathysclown]

I have just had a bathroom renovation completed. I am querying the fitter's invoice, and he thinks I am wrong, but I don't understand his explanation. Which is the correct approach?

Original quote = £6100 plus VAT.

I paid a deposit of £3050 plus VAT, so a total of £3660 paid.

The work has been completed, but he asked me to pay the tiler and electrician directly (not cash, just for them to invoice me directly), which I have done.

I paid the tiler £591.85 (no VAT) and the electrician £552 (no VAT).

The invoice from the fitter for the balance is as follows:

Balance from original quote £3050
Minus tiler £494
Minus electrician £460
Sub total = £2096

Additional extras (which I agree with): £1578.50

Revised total = £3674.50 plus VAT = £4409.40 to pay.

I have queried why the amounts for the tiler and electrician were different to what I paid, and he said that they were the amounts without VAT.

I think it should be:

Balance from original quote £3050
Minus tiler ££591.85
Minus electrician £552
Sub total = £1906.15

Plus additional extras: £1578.50

Revised total: £3484.65 plus VAT = £4181.58.

So overall a difference of £227.82.

Not a huge difference I know. My fitter is getting pissed off with me asking about it, so I feel like I should just pay it, and that I must be incorrect in my calculations??

Thoughts from anyone who understands this better than me would be appreciated!

Could you contact the tiler and electrician to check whether or not they are VAT registered, and if they aren't, ask them if they realise the fitter is treating your quote as if they are, and if they know why?

It's nothing to do with vat really - you've already paid £1143.85 towards the balance when you paid the electrician and the plumber, so he needs to deduct that from the total. If he says they have charged you vat when they shouldn't have then you need a refund from them. You shouldn't be paying it once to the plumber and then again to the fitter.

Thanks for your responses - I will try and work it out with him.

Yes agree with pps you need to establish if the other trades are VAT registered as you have paid it so it needs changing if they are not.

I agree with your builder.
He has put the pre VAT amounts in the system, because he is working pre VAT.
The other way to do it is to add the extras onto the quote, add the VAT. This is the total you must pay. Then take off the amount you paid as deposit, and the 2 separate invoices. What is left is what you need to pay.

It has not made you worse off.

You have agreed to pay £61001.2+£1578.51.2=£9,214.2
You have paid 3660+591.85+552=£4,803.85

That leaves a balance of £4,410.35 which is correct bar rounding errors.

He is on dodgy ground from a VAT point of view though. He as quoted you for the job as a whole so this would be considered a single supply for VAT purposes. The sub contractors should invoice him and he should invoice you. As he is VAT registered, VAT should be charged on the total.

By getting them to invoice you directly, there is a VAT saving because the subcontractors are not VAT registered.

The difference between the two calculations is the VAT not being made that should be. He is treating it as if the subcontractors were VAT registered and charging you the VAT on it even though it is not being paid over to the Crown.

Legally, you are correct. If you have agreed prices excluding VAT then you pay that and any VAT due. If by doing this there is less VAT due, you pay less.

Maybe splitting the difference would be fair. Both have a cut of the saving.