I've been in business for fourteen years, and I'm married to an accountant. But this year I've been asked to do some things by some of our suppliers that I'm not very happy about, and I really want to check for legality.
1) I have a major event that we are committed to running a tournament at. This tournament has a ticket price that is being paid to a third party. I have been asked by that third party to invoice them for the entire cost of the tournament ticket, including the VAT, and they will then counter invoice me for their table charge ex VAT. And then pay the difference. This seems to give me a disproportionately high VAT charge which I would incur, which they will subsequently claim back, while the amount of goods I am in fact supplying is substantially less than the amount I am being asked to quote. To me this sounds odd, as they'll be essentially making several hundred pounds at my expense that I do not believe they are entitled to, purely by claiming VAT back on products that were overcharged. This really doesn't feel like it should be legal.
2) A supplier recently quoted me a 40% margin on a product that they also sell direct from a website. That website has a VAT number. When they produced an invoice, that 40% margin was discounted from the MSRP, but then VAT was added onto my invoice which reduced the margin to 28%. This seems to imply that the MSRP they sell direct from their website at does not include VAT. And yet they are VAT registered. They fake confusion whenever I bring the matter up - I mean, its not like I don't handle margins and VAT every single day. But in our industry they are supposedly one of the biggest mail order companies, and I am becoming increasingly convinced that they are simply defrauding VAT, and the employee I am speaking to is too stupid to understand that. I mean, quoting a 40% margin has to be either all exVAT or incVAT, surely?