Reply to: Agency holding off paying VAT only invoice

[TheFaQQer]

To be honest, from what the agency guy said, the accounts department didn't really want to take responsibility for it - maybe cos of all the hassle that WindyAnna was talking about, I don't know.
He told them that I was now seeking legal advice (I didn't say anything of the sort) and they've promised him they'll pay this week. Guess I'll find out on Friday!
And no, the agency name doesn't begin with 'S'.
Thanks for your replies

So, did they pay you?

[ruth11]

To be honest, from what the agency guy said, the accounts department didn't really want to take responsibility for it - maybe cos of all the hassle that WindyAnna was talking about, I don't know.
He told them that I was now seeking legal advice (I didn't say anything of the sort) and they've promised him they'll pay this week. Guess I'll find out on Friday!
And no, the agency name doesn't begin with 'S'.
Thanks for your replies

[Hevra]

It sounds a bit of a dodge to me but I've only ever worked with one system so my comments are likely to be of limited value. We pay back vat in the next available payroll run (weekly), I don't know what it is they're applying for...

Hevra

[poser]

Just a thought - lots of finance systems don't cope well with VAT only invoices and so the invoice ends up getting put on as a bodge and they then have to mess around and manually adjust the VAT return. I may be being excessively nice to them but maybe this is the problem? If so the way round it (and, in fact, the correct accounting process since the service and the VAT should really be on the same invoice) is to credit the invoices you raised at 0 VAt and the VAT only invoice and then re-issue the invoices with VAT. Net result is the same and the amount owed to you on their AP system will equal the VAT only invoice.

Windy

I can appreciate this but they are still earning interest on that money.

[WindyAnna]

Just a thought - lots of finance systems don't cope well with VAT only invoices and so the invoice ends up getting put on as a bodge and they then have to mess around and manually adjust the VAT return. I may be being excessively nice to them but maybe this is the problem? If so the way round it (and, in fact, the correct accounting process since the service and the VAT should really be on the same invoice) is to credit the invoices you raised at 0 VAt and the VAT only invoice and then re-issue the invoices with VAT. Net result is the same and the amount owed to you on their AP system will equal the VAT only invoice.

Windy

[BoredBloke]

Speak to the Vat people and explain what they are doing and find out the legalities of it - I've never heard of the agency having to apply for something before they can pass VAT on. Sounds like they are taking the pi55 to me.

[pisces]

Do they begin with S?

My agency did the same thing to me stating 'it was policy to wait 4 weeks' or some crap like that. I got it in the end after much dragging of their heels.

[ruth11]

name and shame?

No. Other than this, they've been very good, so no need to name and shame. Have now been assured that they will pay me this Friday when they pay last week's invoice.

If they fail again, I might consider it.

[DS23]

...So far, I've received 3 weeks worth of payments including VAT since I sent the number, but they've not paid the VAT only invoice yet....

name and shame?

[WindyAnna]

As long as you state your Vat number on the invoice there is no reason whatsoever for them not to pay it.

Windy

[TheFaQQer]

Thanks for confirming my suspicions.
I've just called the Agency guy to chase again and his response was that his accounts department keep trying to blind him with science when he chases on my behalf but will chase again.
I've said that I feel like I'm being stitched up by them now. Hopefully he'll call me back with something positive but if nothing at the end of the week when I get paid, I'll put something in writing.

It's not a case of you being stitched up - after all, it's not your money. I guess that if you explain to him that if they fail to pay you, they are committing VAT fraud, and you would need to report this to HMRC when you file your return, then they might suddenly find the authorization they need!

[ruth11]

Thanks for confirming my suspicions.
I've just called the Agency guy to chase again and his response was that his accounts department keep trying to blind him with science when he chases on my behalf but will chase again.
I've said that I feel like I'm being stitched up by them now. Hopefully he'll call me back with something positive but if nothing at the end of the week when I get paid, I'll put something in writing.

[Hex]

Or politely suggest to them that if they can't pay the invoice straight away you will need to talk to HMRC to find out what the procedure is when a client is witholding VAT payments.

After all, this is money your are collecting for HMRC.

[TheFaQQer]

They will have already invoiced with VAT to the client, so should have no problem passing the money onto you.

Tell them that they need to pay this this week, as you need to be sending in your VAT return soon, and that if you have not received the payment then you will have to pass that information onto the VAT man.

It's not your money, or theirs - it belongs to the VAT man, therefore it's him that they are p1ssing off.

[MrRobin]

They have to apply for something???

You don't say to the girl at the checkout at Tescos that you can't pay the VAT on the bill because you're waiting for your VAT application.... what a load of tosh. Re-bill with a big red OVERDUE plastered all over it.