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VAT on materials only..

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Hi all,

Speaking with friends and curious in relation to this.

Trader invoices for materials only and does not charge VAT as they intend to work on the fit of these materials at a later date, and does so in the context of a new build residential.

They invoice again after commencing work and include supply and fit which they’ve correctly zero-rated.

Should they still have charged VAT on the supply of materials only, regardless of the context?

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Hallerud at Easter
By DJKL
18th Sep 2019 15:09

I suspect poor wording on the first invoice.

It is not uncommon with smaller contractors that they seek to get some funds to cover materials at the front end, so issue an invoice on account to get the money to cover this outlay, strictly speaking one could well argue this is just supply of materials but really, contractually, it is stage invoicing towards an overall contract if there is an overall contract.

I would certainly be uncomfortable if there was no written contract of if the party was in the habit of making material only supplies, otherwise I would just be telling them to put on the invoices:

Stage payment 1 in terms of contract ZZZZZZZZ dated RRRRRRRR

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RLI
By lionofludesch
18th Sep 2019 18:11

If they actually fit them, I think you have an arguable case.

But it shouldn't be too difficult to reword the invoice as a stage payment and avoid the argument.

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