Originally posted by TheCyclingProgrammer
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Previously on "Software Supplier calculates support costs incorrectly - charging VAT on VAT"
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Originally posted by metageek View PostI'm disputing an annual invoice for software maintenance - it's the first one I've received, and I reckon they've overcharged me, so I disputed it.
The annual charge for Support is 22% of the purchase cost of the software, and here's how they work it out:
1. Add VAT to the Purchase Cost
2. round up to the nearest £100
3. calculate 22% of the total
4. add VAT
So, I'm paying support costs for the VAT, and a few quid I didn't even spend, then being charged VAT for it - paying VAT on the VAT.
My question is - does this seem reasonable? I don't think it is, so I've only paid them 22% of the ex-VAT purchase price.
The supplier is a very large well-known company, and they're not responding to emails, or the dispute case I raised on their billing portal.
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I think this is pretty common and I had it with a client a few months ago.
Paid for their hosting with VAT and then when I charged them asked my accountant if I should add VAT again. She said it was up to me. If I didn't then it would be a disbursement (?) but if I wanted to add VAT to a VAT included amount then that was fine. I chose not to.
Leave a comment:
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Originally posted by metageek View PostI'm disputing an annual invoice for software maintenance - it's the first one I've received, and I reckon they've overcharged me, so I disputed it.
The annual charge for Support is 22% of the purchase cost of the software, and here's how they work it out:
1. Add VAT to the Purchase Cost
2. round up to the nearest £100
3. calculate 22% of the total
4. add VAT
So, I'm paying support costs for the VAT, and a few quid I didn't even spend, then being charged VAT for it - paying VAT on the VAT.
My question is - does this seem reasonable? I don't think it is, so I've only paid them 22% of the ex-VAT purchase price.
The supplier is a very large well-known company, and they're not responding to emails, or the dispute case I raised on their billing portal.
Sounds a bit rough of them, to be fair.
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If they are a UK VAT registered company then whatever they charge you, they have to charge VAT on top of this. You're not paying "VAT on VAT", you're simply paying VAT on their support charge.
What you are disputing is their method of calculating their support charge. How this is calculated should be in whatever contract/agreement you have with them. What does it say?
Leave a comment:
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Software Supplier calculates support costs incorrectly - charging VAT on VAT
I'm disputing an annual invoice for software maintenance - it's the first one I've received, and I reckon they've overcharged me, so I disputed it.
The annual charge for Support is 22% of the purchase cost of the software, and here's how they work it out:
1. Add VAT to the Purchase Cost
2. round up to the nearest £100
3. calculate 22% of the total
4. add VAT
So, I'm paying support costs for the VAT, and a few quid I didn't even spend, then being charged VAT for it - paying VAT on the VAT.
My question is - does this seem reasonable? I don't think it is, so I've only paid them 22% of the ex-VAT purchase price.
The supplier is a very large well-known company, and they're not responding to emails, or the dispute case I raised on their billing portal.
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