Reclaim VAT on refurbishment

[SusieS]

I am registered for VAT and employed a builder to carry out refurbishment of new premises I am leasing. The builder is not VAT registered. The agreement with builder was that either I would purchase materials and supply them to him for the works (eg wood laminate which was required) or that I would pay him cash as and when he needed to purchase materials for the works or to pay for labour, and that he would in due course give me the VAT invoices for the purchases so I could reclaim the VAT. Having completed the works he now refuses to hand over the invoices on advice from his accountant as the invoices are in some cases made out in his name (eg where he has an account with the builders merchant). Does it affect my ability to reclaim the VAT if the invoices have his name on them given our very specific agreement on this matter?

[paultaylor@vatease.c]

The fact that the invoices are made out in the name of the builder is likely to be viewed by HM C&E as evidence that the supply was to him and, if picked up during a visit, they would likely refuse any claim to input VAT.

There could be an argument that the builder was collecting purchases made on your behalf and that the invoices are therefore incorrect. I should think that HM C&E would resist that argument.

The have been tribunal cases whereby the chairman has accepted that a registered person can reclaim input VAT even though invoices were made out to other parties. You could reclaim the input VAT on this basis and accept the fact that if you receive a VAT visit HM C&E are likely to assess you. You could then decide how far to pursue any argument with C&E.

Regards

Paul Taylor
0121 778 4299
http://www.vatease.co.uk/