Self-employed: advice wanted re dealing with suppliers quotes & invoices

[INeedNewShoes]

I'm self employed and have been for a few years. Most of my suppliers are small businesses/individuals.

I've had a first today in that a supplier who has never previously mentioned that their fee would be plus VAT, and has no mention of VAT on their listed fees on their website has now told me they will be charging the rate we agreed plus VAT.

Is this the norm? Obviously I've learned that I should check with every supplier at the outset whether they will be adding VAT to a quoted price but I'd have thought this would be made clear at the outset.

As a small business I know to make sure that I always quote the price + VAT to make sure there's no confusion. We don't have prices on our own website but i'd expect a company to mention VAT if they were going to charge it. Is it possible that they've only just registered for VAT?

They've probably gone over the income limit and are now required to charge VAT.

If they are vat reg they have to charge vat, maybe they weren’t before

Lesson learned - you need to remind yourself to check every time now.

If a supplier has mainly commercial customers, they will usually be VAT registered themselves, so can recover it anyway. The relevant price to both the supplier and trade customer is the net one.

As I am not VAT registered, it means that if I use a supplier who is VAT registered then I'm faced with either asking them to reduce their actual fee by 20% to allow for the VAT then being added, or I have to pay 20% more to cover the VAT which I can't reclaim myself so a huge cost to me.

Neither scenario feels right as I want the supplier to feel valued and I'm happy with what they have supplied so don't want them to have to reduce their rate, but nor can I afford to pay one supplier 20% more than another who offers the same rate without the added VAT. What do others do in this situation? Avoid using VAT-registered suppliers?

You need to always be sure if their price is vat inclusive or not, however they should tell you when you ask for a quote. A lot of things have vat on them so it can be difficult to avoid vat registered people but that is what you will have to try and do if you don't want to pay vat.

I am self employed and not vat registered, I just have to suck it up and pay the vat on the various software, subscriptions etc that I need for my business. I could choose to register voluntarily, but a lot of my clients are private not business, so it would add 20% on to their bills which is why I haven't done it yet.

Can I ask why it is you state that instead of just putting VAT in the price and presenting one whole price?

Sorry if this is a very stupid question.

Because we deal with UK companies who are VAT registered, companies and individuals who aren't & charities/overseas companies who we don't charge VAT to.

Yes VAT is a kicker if you're not VAT registered, and it's easy to forget to check and then get stung for it. Sometimes in the past I've tried going back to say something along the lines of "we're not VAT registered so VAT is a direct cost for us - is there any chance you could reduce your rate to reflect that?" Some people just won't realise it's a problem until you point it out, if they are mainly dealing with larger businesses who just reclaim the VAT.