Client not wanting to pay VAT

[Gumbo Robot]

I've just competed a bit of work that I pulled in direct.

A simple website for a charitable organisation.

They are querying my invoice as I am charging VAT on top of the quoted price and they are not VAT registered.

So, my question is this: is it implicit that VAT will be charged on top of the amount I've quoted? Or am I going to have to take this one on the chin?

[cojak]

My understanding is that they are the ones to take it on the chin, charity or no (or they get dispensation?)

It's the last transaction to pay.

I can't see how retailers will let me off paying VAT if I tell them I'm not registered (personally, not as a business).

If I had to pay it, I can see me not doing work for charities, on the basis that I'm not one.

[Gumbo Robot]

My understanding is that they are the ones to take it on the chin, charity or no (or they get dispensation?)

It's the last transaction to pay.

I can't see how retailers will let me off paying VAT if I tell them I'm not registered (personally, not as a business).

If I had to pay it, I can see me not doing work for charities, on the basis that I'm not one.

But when I quoted should I have explicitly said the figure was ex-VAT? That's what they are insinuating.

[eek]

But when I quoted should I have explicitly said the figure was ex-VAT? That's what they are insinuating.

You should have done. They should also have checked. Both assumptions have made a fool of absolutely everyone..

However, without seeing exactly what your contract says its difficult to say who is more at fault.

[jmo21]

But when I quoted should I have explicitly said the figure was ex-VAT? That's what they are insinuating.

I always quote £x+vat so there is no confusion.

[TheFaQQer]

You should have done. They should also have checked. Both assumptions have made a fool of absolutely everyone..

However, without seeing exactly what your contract says its difficult to say who is more at fault.

This - without knowing exactly what form the contract took, it's impossible to say where the blame lies.

If it's you, then you give them a discount, invoice for the same amount including VAT and pay the money over.

If it's them, then they pay you the money that you invoiced.

And everyone learns from the experience and makes sure next time they quote and pay correctly.

[TheCyclingProgrammer]

But when I quoted should I have explicitly said the figure was ex-VAT? That's what they are insinuating.

To avoid this kind of situation, yes. Its *normally* assumed that prices are quoted ex. VAT in B2B situations but why rely on assumptions? Did they even know you were VAT registered?

You essentially have two choices here: 1) Re-issue the invoice to show the price you quoted inclusive of VAT and effectively take the hit of the reduction in your rate or 2) Push for payment of the outstanding invoice and chase like any other debt.

I don't think the charity have that strong a case to not pay your invoice as long as they were at least aware you are VAT registered, but in future, make it clear that your rate excludes VAT.

[eek]

To avoid this kind of situation, yes. Its *normally* assumed that prices are quoted ex. VAT in B2B situations but why rely on assumptions? Did they even know you were VAT registered?

You essentially have two choices here: 1) Re-issue the invoice to show the price you quoted inclusive of VAT and effectively take the hit of the reduction in your rate or 2) Push for payment of the outstanding invoice and chase like any other debt.

In future, make it clear that your rate excludes VAT.

You forgot the important bit. And client is a charity so this wasn't a b2b transaction in their eyes.

And many charities are ran by the well meaning clueless

[BlasterBates]

At the end of the day it's sufficiently not clear as to be not worth chasing up I would say, unless your offer explicitly mentioned VAT; In this particular case I would just take it on the chin.

In my view the offer should explicitly include VAT. I know B2B with agencies quoting the rate no one cares about the VAT, but generally if you are running a businesses your offers should include details on VAT. Prices in shops or plumber's quotes include the VAT, or explicitly mention it.

Check your correspondence, did you write 300 per day or 300 per day plus VAT. If you wrote 300 day, then 300 it is.

The charity is not employing contractors, it gets the plumber or the builder in, and it's used to the conventions they use i.e. they quote including VAT.

[GillsMan]

Yup, I'm afraid you'll probably have to take this one on the chin. You'll need to re-issue the invoice (or possibly issue a credit note for the amount of the original invoice, then issue a new invoice for a lower amount). Of course, you have to charge VAT, so your new amount will be the original amount quoted including the VAT.

For B2B transactions, you don't need to include VAT in the price, but you do need to make clear whether the quote includes or excludes VAT.

If advertising/quoting to the public, you need to include VAT in the price. Something many recruitment/estate agents do not understand and it is maddening.