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VAT and duty undercharged to consumer

When a consumer knows that VAT & duty have been under-charged is s/he obliged to do anything?

A supplier has invoiced me incorrectly by omitting to charge duty and charging an incorrect (lower) rate of VAT on the supply. What has happened is that the end use of the supply has been wrongly entered on their system, despite me telling them what the end use is, and the end use makes a big difference to the duty & VAT position. If I was registered for VAT I would write to the supplier to point out the mistake and request a corrected invoice. But on this occasion I am merely a consumer. I think many consumers would look at the total on the invoice and if it was what they were expecting (or lower!) they would do nothing. Does the fact that I know the supplier has made a mistake put me in a position where I have a legal obligation to do something about this? Searches reveal lots of references to incorrect VAT in the context of business-to-business supplies but I haven't found a reliable source which deals with business-to-consumer transactions from the consumer's point of view.

By the way, this particular supplier has an incompetent back-office team (nice people, but incompetent) and I think that trying to get them to correct the invoice will be just as difficult as trying to find someone at HMRC who could understand what I am talking about and advise me.


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24th Jun 2018 10:51

If you had been dishonest in describing to the supplier relevant details (such as the proposed end use) then that would be an offence.
But (having supplied the correct information to the supplier) I do not think you (as a non-business consumer) have any legal obligation to go back to the supplier again when he has made his decision regarding the appropriate amount to bill you and you disagree with his decision.

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24th Jun 2018 15:11

If you agreed terms with a supplier (whether as a consumer or otherwise), why would you not be honest in your dealings and advise the supplier of their error?

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24th Jun 2018 17:24

David - many thanks
Accountant A - I thought I had explained the reason when I said: "I think that trying to get them to correct the invoice will be just as difficult as trying to find someone at HMRC who could understand what I am talking about and advise me." Believe me, this organisation is an utter nightmare to deal with. They have nearly finished creating a supply monopoly in their field and they don't care tuppence about keeping customers happy. I don't really care about the money, it's the thought of having to go through their call centre and spend possibly hours on the phone (or send letters or emails which are never answered) that makes me want to just shrug my shoulders and move on. At this point the only thing I care about is the legal position. Obviously if they spot the mistake themselves and re-issue the invoice I'll pay it without demur.

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25th Jun 2018 12:04

@ C.Y. Nical (OP).

You have agreed a price for the supply of goods, and received an invoice for an amount which you are aware is incorrect (and if I correctly interpret your question and subsequent post, you know what the correct figure should be).

I see no merit or reason in spending any excessive time in contacting the supplier. However, you have a MORAL and ETHICAL obligation (I shall leave aside the legal implications) to pay the correct amount. You thus simply need to make payment, using your normal payment process, of that CORRECT amount.

In addition, you should send a straightforward letter or email, to the supplier, advising them that you have paid the correct figure (with your calculation thereof), and requesting an amended invoice (or additional invoice for the undercharge).

I fully appreciate your comments re the substantial flaws in the supplier's working procedures. Your ethical standards should not be influenced thereby.

In the hopefully unlikely event that the supplier takes no heed of your email/letter and you thus receive a bank credit "refund" from the supplier, then, again at minimal inconvenience, you should notify the bank since retaining it would be unethical (and IMHO a criminal offence).

There is no reason to contact HMRC at all, re this matter.


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