Rate, Vat and legal position

[TheCyclingProgrammer]

Make sure the agency also re-issues the VAT invoice to the client because regardless of whether you generate your own invoices internally for your records/bookkeeping purposes (which is good advice), from a VAT point of view the self-billing invoice is the document that matters and it has been issued incorrectly (the end client should insist on this anyway or they won't be able to recover the VAT but double-check).

I too would assume a rate quoted without mentioning VAT is ex. VAT as this is normal business practice but its never a good idea to have important things like this remain ambiguous.

[swebb]

Thanks for the advice fella's. I got an email back from the agent via his phone which was good of him at the weekend. He has confirmed the rate is net of VAT and he will contact the accounts dept Monday to get them to sort it out.

Next time I will make sure via writing that the rate is not inclusive of VAT, a lesson learned.

[Scruff]

OK, you win.

[ASB]

B2B rates are always quoted net of VAT, since the rate for work performed is the rate for the actual work. It is charged with the "Value Added", which is the VAT, by definition, and charged adding this on. I have been doing this for many years and not once has this ever been in any doubt.

I am sure that is your experience; and that of many. But it is not the case under uk contract law. It has also gone as far as the ecj. If a contract is silent on vat then the price includes any vat which may be chargeable. (External indications such as pre contract negotiations can produce an implied term of vat being additional).

[Scruff]

B2B rates are always quoted net of VAT, since the rate for work performed is the rate for the actual work. It is charged with the "Value Added", which is the VAT, by definition, and charged adding this on. I have been doing this for many years and not once has this ever been in any doubt.

[tractor]

...

No, it is nonsense that you don't raise your own invoices and rely on someone else to do it for you. There are also a host of complications over VAT point and liability for mistakes. If you use SB then fine, but for your own purposes treat the agency "invoice" as a remittance advice and raise your own invoice to keep your own accounting straight (and, incidentally, to meet the requirement that invoices must be numbered sequentially).

It's nothing to do with the rights and wrongs of SB (although SB was never meant for continuing supply, but was to be triggered by a point delivery, hence the VAT issue), it's all about yet another sodding useless agency doing things on the cheap to save themselves effort.

Yeah, we ought to sort those agencies out!

[malvolio]

Utter bollocks yet again about self billing. This has nothing to do with SB. It is potential deceit by the agent in not making clear the rate was VAT inclusive or not.

No, it is nonsense that you don't raise your own invoices and rely on someone else to do it for you. There are also a host of complications over VAT point and liability for mistakes. If you use SB then fine, but for your own purposes treat the agency "invoice" as a remittance advice and raise your own invoice to keep your own accounting straight (and, incidentally, to meet the requirement that invoices must be numbered sequentially).

It's nothing to do with the rights and wrongs of SB (although SB was never meant for continuing supply, but was to be triggered by a point delivery, hence the VAT issue), it's all about yet another sodding useless agency doing things on the cheap to save themselves effort.

[BolshieBastard]

Right I've started another contract, standard type of contract, daily rate, x hrs a day ....

I've now received the first payment in to my company bank account and it appears that the amount paid is the quoted rate times * 5 days. Now normally I would expect this plus the VAT. I have also received a copy of the invoice from the agency and the NET and GROSS boxes contain the same amount!

I've contacted the agent about this but obviously being the weekend I won't be getting a reply until next week.

My understanding has always been that the daily rate is less VAT, my last 10yrs of contracts have followed this rule. The new contract does not specify VAT either way, just a daily rate. I also confirmed the rate was less VAT with the agent before accepting, but over the phone.

Where do I stand legally if the agency start playing hard ball ? I would be looking to leave the contract if they don't agree that I should also be getting the VAT.

Thanks

You should always quote your rate excluding VAT and make that clear. I always did to avoid situations like this.

If VAT was included in the rate on offer and they are VAT registered, they have to quote a rate to you as VAT inclusive or VAT exclusive.

I'm guessing you're on a self-billing nonsense, and haven't issued your own invoice? Check that the agency knows you are VAT registered (I assume you are) and have your VAT number. Also check your contract to see what is says about rate and taxes. Finally, check that the agency aren't paying the VAT on your behalf and if they are, ask them what the hell they're playing at since that makes you illegal; you have to charge VAT on all your billings.

Utter bollocks yet again about self billing. This has nothing to do with SB. It is potential deceit by the agent in not making clear the rate was VAT inclusive or not.

[ASB]

E-Nik Ltd v Department for Communities And Local Government [2012] EWHC 3027 (Comm) (02 November 2012)

The above might be of interest. And uncomfortable reading. Overall the position is uncertain, but to be certain it does need to be a contractual term.

[tractor]

...

Sounds more like cock up over conspiracy to me.

Send them another copy of your VAT certificate and ask them to make the appropriate adjustments and to include the VAT on future invoices. Phone if you like but back it all up with emails or written communications.

And check the contract more carefully in future This is not something that I would expect a contract reviewer to consider.

[malvolio]

I'm guessing you're on a self-billing nonsense, and haven't issued your own invoice? Check that the agency knows you are VAT registered (I assume you are) and have your VAT number. Also check your contract to see what is says about rate and taxes. Finally, check that the agency aren't paying the VAT on your behalf and if they are, ask them what the hell they're playing at since that makes you illegal; you have to charge VAT on all your billings.

[swebb]

Right I've started another contract, standard type of contract, daily rate, x hrs a day ....

I've now received the first payment in to my company bank account and it appears that the amount paid is the quoted rate times * 5 days. Now normally I would expect this plus the VAT. I have also received a copy of the invoice from the agency and the NET and GROSS boxes contain the same amount!

I've contacted the agent about this but obviously being the weekend I won't be getting a reply until next week.

My understanding has always been that the daily rate is less VAT, my last 10yrs of contracts have followed this rule. The new contract does not specify VAT either way, just a daily rate. I also confirmed the rate was less VAT with the agent before accepting, but over the phone.

Where do I stand legally if the agency start playing hard ball ? I would be looking to leave the contract if they don't agree that I should also be getting the VAT.

Thanks