Agency Wants Money Back

[Old Greg]

I think your best bet is to negotiate with the agency and come to some sort of compromise - you are both at fault for the reasons you mention here but the mistakes made sound as though they were just simple human error caused by trying to sort things out in a hurry. If either party went down the legal route I would imagine you would be advised to arrange a compromise and that way, although you may both be a little out of pocket, you can walk away with an amicable agreement - you never know when you may need each other

+ 1

Split the difference? Make the offer and document it so you can take the evidence that the offer was made and rejected if it gets to court.

[GillsMan]

Hi all,

Thanks for the advice and I definitely think that making an offer is the sensible way to proceed. Interestingly, since their phone call on Friday, they've yet to follow it up with an email detailing the discrepancies. Until they do, I won't be doing anything.

But once (if) I do receive formal notification, I'll definitely look to make an offer and negotiate. It's sensible and probably the fairest thing.

[Safe Collections]

Hi all,

Thanks for the advice and I definitely think that making an offer is the sensible way to proceed. Interestingly, since their phone call on Friday, they've yet to follow it up with an email detailing the discrepancies. Until they do, I won't be doing anything.

But once (if) I do receive formal notification, I'll definitely look to make an offer and negotiate. It's sensible and probably the fairest thing.

If you do negotiate, don't forget to do it without prejudice.

Just in case

[Ketchup]

Reading between the lines here, you must have known they had overpaid you and thought you had got away with it. If it went to court neither party would win.

I would negotiate with them to split the difference.

[GillsMan]

Reading between the lines here, you must have known they had overpaid you and thought you had got away with it. If it went to court neither party would win.

I would negotiate with them to split the difference.

Reading between what lines? I've explained why I wasn't sure - multiple contracts on the go, first invoice raised three months after the gig started, and so I referred back to the contract to check the amounts.

When you are a proper contractor going from one contract to the next, I accept that's a pretty difficult mistake to make. When you're trying to operate as a proper business with multiple clients, and a full time staff (as I am), it's good practice to refer to contractual terms when invoicing, to ensure you're invoicing the right amount and not just trying to remember what you negotiated several months ago.

Aaaaanyway. It turns out it is my cock up. The contract stated the amount that the Company will invoice at each milestone. The SoA stated the amount that the Consultancy will invoice at each milestone.

Company = Agency
Consultancy = My LtdCo

Christ knows why they put the amount they were billing the end-client on the contract with my ltd company, but there you go. Can't see any room for negotiation here now, I owe them the money and that's that. A painful and expensive lesson to learn.

Before I admit this to the agency, I will need to double-check legal advice, since I have paid VAT bills based on those invoices, and Christ knows what I'm supposed to do with regards to that. Also, I assume I need to refund the VAT portion of invoice as well, so will need to involve the accountant.

What a mess. Anyone who thinks I was trying to pull a fast one can do one though.

As promised, I'll keep you posed, but it looks like I'll be paying it all back anyway.

[TheFaQQer]

When you're trying to operate as a proper business with multiple clients, and a full time staff (as I am), it's good practice to refer to contractual terms when invoicing, to ensure you're invoicing the right amount and not just trying to remember what you negotiated several months ago.

Might I suggest some kind of system of recording what you agree to. Possibly something as sophisticated as a pen and piece of paper, or even some kind of spreadsheet... A proper business might also check the contract and resolve these issues beforehand.

Aaaaanyway. It turns out it is my cock up. The contract stated the amount that the Company will invoice at each milestone. The SoA stated the amount that the Consultancy will invoice at each milestone.

Bummer. At least it's sorted out, though - daft wording, but at least it shouldn't need to go legal.

[Contreras]

Before I admit this to the agency, I will need to double-check legal advice, since I have paid VAT bills based on those invoices, and Christ knows what I'm supposed to do with regards to that. Also, I assume I need to refund the VAT portion of invoice as well, so will need to involve the accountant.

Issue a Credit Note for the difference between what the agency paid and should have paid (or issue a credit note for the original amount and then issue a new invoice), then adjust your next VAT return to account for the difference in VAT. The agency must adjust their next VAT return similarly but that's not for you to worry about.

What credit and debit notes must show

All credit notes and debit notes issued must have a reference to the number and date of the original invoice. They must also clearly show both the correct and incorrect amounts of VAT.

To be valid for VAT purposes a credit or debit note must:

• be headed 'credit note' or 'debit note' as appropriate
• reflect an agreed reduction in the value of the sale and be issued within one month of this agreement
• represent a genuine entitlement or claim for the amount either to be refunded or offset against the value of future sales

A valid credit or debit note must also show:

• an identifying number and the date of issue
• the name, address and VAT registration number of the supplier
• the name and address of the customer
• the reason for its issue
• a description of the goods or services
  
• the total amount credited, excluding VAT
• the rate and amount of VAT credited
• the number and date of the original VAT invoice
  

Adjustment on VAT returns

If your VAT return needs to be adjusted for credit or debit notes that apply to a transaction that occurred in a previous VAT accounting period, HM Revenue & Customs (HMRC) considers this to be a normal VAT accounting adjustment, not an error.

Processing issues: Credit Notes
HM Revenue & Customs: Returned goods, credit notes, debit notes and VAT
Notice 700 - The VAT Guide

[Dominic Connor]

When ?

Was the schedule agreed after the contract, before, or as part of it ?