So this is a tricky one,
Just by way of introduction - I'm a long time reader on these forums but this is the first time I've needed to actually chime in, so apologies for coming straight in with a question
I'm also not sure i'm posting this in the most relevant area, so please feel free to move this. Its more customer to business transaction advice i'm looking for here but hopefully you guys will be able to help me.
I am doing a house extension and i employed an architect to work on the plans. When I hired him he was not VAT registered and we signed a contract that he would receive 9% in fees of the total cost of the build.
We worked out the initial budget of 150k as an estimate and so was able to deduce how much I was likely to end up paying in the end. Things are broken into stages, A, B, C, D etc. and to date, I have paid for stages A to D based on the cost estimate of 150k.
These invoices for stages A - D were invoiced with no VAT as he was not VAT registered at the time of completing the work / nor at the time of invoicing for the work.
Now, since then he has become VAT registered. Also since then, the cost estimate of the build has increased to 250k - So the money I paid for stages A - D are now, in fact, short of the actual amount required for stages A - D because of the % scale.
To try to be as clear as possible
@150k cost estimate stages A - D cost = £4,725
@250k cost estimate stages A - D cost = £7,875
Now he invoiced me for stages A to D when he was NOT VAT registered and I paid for those services, however, as it's a percentage and it fluctuates with the cost, he has re-invoiced me for the now shortfall in this area, but crucially has invoiced + VAT.
My argument here is that even though he is now VAT registered and must charge VAT - the work that he did in stages A to D were done before he was VAT registered. So where does this leave me? Is he right to be charging VAT here? It doesn't feel right that i should have to pay VAT because of a revised invoice on work completed and invoiced before he was VAT registered?
Hopefully, someone can help me out with this one!
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