Please can someone please explain VAT.

[Esther00]

I'm in a bit of a muddle with VAT on a builders quote for dormer loft and other reconfiguration of the living areas.

The builder would be sub contracting lots of trades. Plasters, plumbers, carpenters, electricians etc. I get VAT would be paid for materials. I think I understand that not all trades people have to be VAT registered. Or would the fact they are doing work for the main contractor mean that VAT is payable? Would some invoices (handled and paid for by the builder) include VAT and some wouldn't need to?

My question is really how can I be sure my VAT bill is accurate?

If the builder you employed is registered for vat ,then he will be charging you vat on everything he invoices you for . If he sub contracts to non vat payers he still has to charge you vat , as It is his services he is charging you for

Ah, right. But wouldn't VAT be paid for twice in that case. When the builder pays the sub contractor, then again when I pay the builder?

No, because they knock off the VAT already paid

e.g.
sub-contractor input £120 inc £20 VAT

Main contractor charges you £240 inc £40 VAT

He has to pay the £20 difference

You are only paying £40 VAT (not £60)

Thanks. Also when getting a quote from a builder is it useral practice to include VAT on this quote or not? Mine doesn't say and it's just occurred to me that it may not be included 😱 I will obviously be asking but good to be armed with a bit of knowledge beforehand.

It should be VAT inclusive.

Some people A common trick is to quote you a price which you accept, then later tell you that you have to pay an extra 20%

So get it in writing.

Thanks pigletjohn xx

Out builder quoted us for the full job including vat but when he received invoices from sub contractors who didn’t charge vat he let us pay them directly and then knocked the amount plus vat off his final bill.

Thanks everyone. Panic over! The quote was inclusive of VAT. I'm getting a bit twitchy and nervous as the start date is almost here. Need to get a grip if I'm to get through these next few months 😵👷

We paid all our trades and materials directly and just paid the builder his bit. So in effect only paid VAT on about 30% of the job. As main builder wasn’t VAT registered. Think he did all his jobs that way so effectively he acted as a bit of a project manager doing his bit and we paid everyone else directly. Also saved him adding any margins on.

Meant we also could get an account with local builidng suppliers and pick where we bought the veluxs etc.