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VAT claim for self build domestic property.

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We have recently received a missive from HMRC disallowing VAT on expenditure on the basis that as part of the structure VAT should not have been charged & directing the client to get the money back from the supplier  while saying they will not help in any way. The supplier has refused to amend his invoice & repay the VAT.

It does seem completely inequitable & we will be requesting a review but has anybody else had this problem & what did they do?

 

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chips_at_mattersey
By Les Howard
26th May 2017 16:06

If you have been wrongly charged VAT, you cannot claim it using a DIY claim. The supplier is obliged to amend his invoice(s), and adjust on his VAT Return.
If he fails to do so, then you can make a civil claim against him.

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By Ruddles
26th May 2017 16:12

Seconded. There is ample case law on this. The underpinning principle is that VAT incorrectly charged is not VAT. Look at any guidance on the DIY Refund Scheme and it will say, often in bold letters, that the customer should check that any VAT charged has been done so correctly before parting with the cash.

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By shaun king
27th May 2017 15:01

The issue is the supplier refusing to refund the "VAT" incorrectly charged. If they did their feet in then other than litigation there is nothing you can do. However, experience has shown the costs of litigating more often than not are more than the VAT at stake and you have to write the VAT off.

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By Robbo
01st Jun 2017 14:08

The amounts are several thousand pounds & the supplier has refused despite being shown HMRC correspondence.

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RLI
By lionofludesch
01st Jun 2017 14:19

Sue them.

And, for good measure, report them to the NCA for theft.

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RLI
By lionofludesch
27th May 2017 15:17

If you've been wrongly charged VAT in ANY circumstances, not just a DIY claim, your remedy is to get a refund from the supplier, not HMRC.

Passing on some correspondence from HMRC usually does the trick and I'm surprised it hasn't done in the instant case.

It's a broad brush but, in essence, only materials delivered on site without fixing should carry VAT. Any work, including materials used in doing that work, would be zero-rated.

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By Dick Stastey
27th May 2017 16:07

The usual fact vacuum.

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