VAT - How to tell if a supplier is registered?

A business (B2C) is trying to use VAT "discount" as negotiation lever. Are they really registered?

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Hi all,

I'm a consumer (also qualified accountant.... VAT not my forte though) and looking to renew a service from a business. I was "waived" the VAT the first time and am being told the business will "waive" the VAT again, but the business will lose out.

Of course, this sounds like the business, assuming VAT registered, will receive revenue of 83.33% of the headline price excl. VAT, and account for the delta as VAT and remit to HMRC via VAT return.

However, I am not convinced the business is in fact VAT registered. I am frankly not concerned about whether or not they should be - more that the business is implying they are cutting me a great deal, whereas my suspicion is that they are not VAT registered at all and are taking advantage of this fact to optically provide a discount (hence air quotes around "waive").

I am aware that as a consumer I do not have the legal right to demand a VAT invoice (and was not given one for the first transaction). I cannot see an income statement from Companies House accounts to confirm whether registration thresholds have been met. How can I confirm from public records, or from a legally enforceable request, whether or not the business is indeed VAT-registered?

Many thanks for any insight!

Replies (26)

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By Paul Crowley
26th Aug 2020 01:37

How much is the invoice.
Unless retail scheme applies £250 inc Vat maximum, Vat registered business should supply VAT invoices.

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Replying to Paul Crowley:
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By ducksocks
27th Aug 2020 01:51

Thanks Paul, this would be what you would think but it seems a business is not obliged to produce a VAT invoice for a consumer (even though most would). The fact I never received one is one of the main reasons I doubt they have VAT registration, but equally they could just refuse to provide me with one in any case.

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RLI
By lionofludesch
26th Aug 2020 05:53

As a consumer, what's your concern ?

A one sixth discount is a one sixth discount - whether it's VAT or not, it's money in your pocket.

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Replying to lionofludesch:
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By ducksocks
27th Aug 2020 01:56

Hi, thanks for your question. The point is I do not think the business is VAT-registered - so if the business is saying "I'm cutting you personally a great deal by waiving VAT, compared to other customers" but is in fact not charging VAT to other customers because they cannot, then it's a bull$h!t discount.

Example: say the fee for the service is £100 (it is not, but just to make numbers easy). The business is saying "we would charge you £100 + VAT but I'm going to do you a great deal by not charging you VAT" - my suspicion is that they are trying to make it sound as if I am saving £20, but in fact that they would not be charging VAT anyway (i.e. it does not apply currently to their business) so in fact there is no loss of revenue.

Put another way, I believe the business is trying to make it sound like they are only getting £83.33 revenue out of this and that I am scr*wing them, but if as I suspect they are not VAT registered then in fact it's a completely fake negotiating lever.

I'd like to know whether or not it is a fake lever before I take the next step of negotiation, but I am looking to do this discreetly behind the scenes.

Hope that makes sense!

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Replying to ducksocks:
RLI
By lionofludesch
27th Aug 2020 03:06

ducksocks wrote:

Hope that makes sense!

Sadly, it doesn't.

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Replying to lionofludesch:
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By paulwakefield1
27th Aug 2020 08:30

Does to me. :-)

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By Cardigan
26th Aug 2020 14:33

Is this just a way of saying they are offering you a discount equivalent to the VAT? That is, they are still being VAT compliant and are just offering you a discount.

I've seen a tile shop advertise this. They were offering a discount of X% but instead of saying that, they advertised "We will pay the VAT for you." It appears like it is a better deal. (In the small print, the tile shop outlined what the discount was and that they are accounting for the VAT properly etc.)

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Replying to Cardigan:
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By ducksocks
27th Aug 2020 02:39

Hi, thanks for your response.

It's a little tricky to articulate, but that is exactly what I had assumed they were doing in the first contract set-up. The phrasing was "we are not charging VAT this month" which is (probably purposely) ambiguous - it could mean "we are not registered for VAT at the moment" or "we are discounting the VAT equivalent". But as a consumer (as someone else pointed out), I didn't care at that point.

The difference here (and why I care) is that they are saying "waiving VAT is costing the business money" (i.e. deflating their revenue) - and it’s being used as an emotional lever, in my view. What I am trying to do is find out whether the business is VAT registered. If they are not, then this statement is at best misleading, possibly fraudulent, and should not be used as a negotiating tactic.

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Replying to ducksocks:
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By lionofludesch
27th Aug 2020 07:18

ducksocks wrote:

The difference here (and why I care) is that they are saying "waiving VAT is costing the business money" (i.e. deflating their revenue) - and it’s being used as an emotional lever, in my view. What I am trying to do is find out whether the business is VAT registered. If they are not, then this statement is at best misleading, possibly fraudulent, and should not be used as a negotiating tactic.

Utter, utter rubbish.

Scenario - service reduced in price from £120 to £100 under a "we pay your VAT" offer.

Unregistered business loses turnover of £20.

Registered business loses turnover of £16.67.

Where did you train ?

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Replying to lionofludesch:
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By paulwakefield1
27th Aug 2020 08:36

Alternative view which is what I think Ducksocks is trying to say is:

Usually £100 but we will save you the VAT and only charge you £100 implying the initial amount is plus VAT. So if actually non registered, no loss to the business. If the business is registered then it is genuinely taking a hit.

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Replying to paulwakefield1:
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By lionofludesch
27th Aug 2020 09:23

paulwakefield1 wrote:

Alternative view which is what I think Ducksocks is trying to say is:

Usually £100 but we will save you the VAT and only charge you £100 implying the initial amount is plus VAT. So if actually non registered, no loss to the business. If the business is registered then it is genuinely taking a hit.

Well, he didn't say it very clearly.

How good a deal is a reduction of £0 ?

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Replying to lionofludesch:
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By paulwakefield1
27th Aug 2020 10:01

[/quote]

How good a deal is a reduction of £0 ?

[/quote]

Ducksocks point I believe. :-)

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Replying to paulwakefield1:
RLI
By lionofludesch
27th Aug 2020 17:18

paulwakefield1 wrote:

How good a deal is a reduction of £0 ?

[/quote]

Ducksocks point I believe. :-)

[/quote]

"We'll charge £0 less" isn't a selling ploy which would swing my business.

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Replying to lionofludesch:
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By paulwakefield1
27th Aug 2020 17:50

Not sure whether we are talking at cross purposes or whether you are playing with me!

OP wants to work out whether he is beig sold a fake saving (if not VAT registered) or a real one (If VAT registered)

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Replying to paulwakefield1:
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By lionofludesch
27th Aug 2020 18:01

paulwakefield1 wrote:

Not sure whether we are talking at cross purposes or whether you are playing with me!

OP wants to work out whether he is beig sold a fake saving (if not VAT registered) or a real one (If VAT registered)

If he'd say more plainly what the deal actually is, I'd be able to comment more appropriately.

I've been pointing out to clients that I don't charge VAT for years. If that's all this rogue trader has done, there's nothing wrong with that. But the OP implies that the trader is claiming to have cut his prices by "paying your VAT". What exactly has he said ?

Preferably verbatim.

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VAT
By Jason Croke
26th Aug 2020 14:55

A useful website is www.vat-search.co.uk

It is free to make 5 searches every 10 minutes and there are some adverts on the web page, but you can search by trading name only or trading name plus location (London, Liverpool, etc you don't need an exact address).

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Replying to Jason Croke:
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By ducksocks
27th Aug 2020 02:42

Thanks Jason, I have had a look at this and was recommended it by a VAT accountant friend of mine - he says it's good but not necessarily 100% reliable.

So whilst I haven’t found the business on there, I am not sure I can be certain of the non-registered status.

Appreciate the help!

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By Matrix
27th Aug 2020 07:31

I don’t know why you are choosing not to rely on the site I kindly gave you if you have the name of the trading entity. In my experience it is pretty reliable.

There is an exemption from filing the profit and loss account. Most small companies take advantage of this.

I don’t really know what you want us to add.

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Replying to Matrix:
VAT
By Jason Croke
27th Aug 2020 08:48

Agree about the vatsearch website, I have found it entirely reliable, but as with most IT related things, you have to input the right details. So if it is a sole trader operating under a trading name, you may need to search both, but other than that it has a 100% success rate for me.

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