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Where Taxpayers and Advisers Meet

Can a company add VAT to a quote which has already been accepted and mentions nothing about 'price excludes VAT'

leighski01
Posts:2
Joined:Fri Apr 20, 2018 8:09 pm
Can a company add VAT to a quote which has already been accepted and mentions nothing about 'price excludes VAT'

Postby leighski01 » Fri Apr 20, 2018 8:25 pm

Hi All...

I have a bit of a situation with some builders who gave me a quote for a job stating 'Total for Works = £7000'. I accepted the quote and then 2 weeks later they asked for a holding deposit which was for '£500 + VAT' (because it clearly stated the VAT i was happy to pay this). It was agreed that they would start the job a few months after the deposit was paid and no further money was mentioned until 2 weeks before work commenced when they asked for 50% of the total cost + VAT' (less the holding deposit). Because the original 'Total for Works = £7000' quotation mentioned nothing about VAT having to be added, i believed this to be the total cost of the job and further read that legally the company HAS to stipulate in a quote if VAT is exclusive of the quoted price.

On challenging this with the company they informed me that they became VAT registered after the quotation was accepted and therefore have to add VAT to quoted price...

Can someone please shed some light on this as i feel they are trying to fleece me.

Many thanks
Leighski

someone
Posts:691
Joined:Mon Feb 13, 2017 10:09 am

Re: Can a company add VAT to a quote which has already been accepted and mentions nothing about 'price excludes VAT'

Postby someone » Sat Apr 21, 2018 8:43 am

AIUI in business to consumer contracts the quoted price includes VAT unless it explicitly states otherwise.

If your quote includes materials and they incur VAT then the business will be able to reclaim that VAT so they are only out the VAT on the labour.

Your best bet might be to try and agree a new inc VAT price that splits the difference so you pay a bit more, they make a bit less return.

(e.g. originally 3500 materials, 3500 labour - they need to charge you 700 VAT to make the same return. So you pay 7380 and they pay 1230 to the VAT man and reclaim 580 - if I've done those sums right in my head)

If it was a quotation then you might be able to hold them to the original price. If they refuse then you could get someone else to do the work and sue for 'loss of bargain' but that's a high risk strategy that might only succeed in costing you lots in legal fees.

leighski01
Posts:2
Joined:Fri Apr 20, 2018 8:09 pm

Re: Can a company add VAT to a quote which has already been accepted and mentions nothing about 'price excludes VAT'

Postby leighski01 » Sun Apr 22, 2018 12:30 pm

Thanks very much for your reply.

What you say makes complete sense... I'll be contacting Citizens Advice after the weekend to report these clowns.

Very grateful for your reply.


Leighski

GlobalTaxAdviser
Posts:633
Joined:Fri Dec 05, 2014 1:18 am

Re: Can a company add VAT to a quote which has already been accepted and mentions nothing about 'price excludes VAT'

Postby GlobalTaxAdviser » Mon Apr 23, 2018 4:18 pm

They are not trying to deceive you it is just the fact that they unexpectedly or unknowingly went over the VAT threshold and hence need to charge the VAT otherwise it will become a 20% loss on the contract. This happens all the time.

You can try to renegotiate the terms or just pull out and they should return the deposit for you.


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