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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How much is the invoice.
Unless retail scheme applies £250 inc Vat maximum, Vat registered business should supply VAT invoices.
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.
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.)
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 ?
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.
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 ?
How good a deal is a reduction of £0 ?
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Ducksocks point I believe. :-)
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"We'll charge £0 less" isn't a selling ploy which would swing my business.
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)
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.
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).
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.
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.