Do you ask about the VAT?
Discussion
Im not talking about doing it for cash so you dont have to pay the VAT, thats illegal.
I've recently had 3 companies round to quote for a new drive way. 2 have come in at £2000ish and the other one £1500.
All 3 are doing the same job same materials ect. I will also be there on the day just to check they dont try and put down 1" of subbase ect.
I was talking to the guy whos quote was £1500 and he said we are usualy cheaper because we are not VAT registered. Great I thought saves me £400.
I have never thought about it before but it kind of makes sense to find small companies not VAT registered to save some cash?
Does anyone else use this tactic.
The problem is that most traders know the market and, if they are not VAT registered, they often use that advantage to make additional profit by just undercutting the VAT registered trader.
You still get a cheaper price of course but you don't know how stable the non VAT Co is and whether they will have the resources to compete the job properly and on time (same can apply to the VAT registered firm of course, just playing devil's advocate).
Often the non VAT trader will want you to buy the materials to keep them under the threshold - that can cause issues with co-ordination, timing, liability in a later dispute, etc.
No rights or wrongs in essence, just be aware of the potential issues.
You still get a cheaper price of course but you don't know how stable the non VAT Co is and whether they will have the resources to compete the job properly and on time (same can apply to the VAT registered firm of course, just playing devil's advocate).
Often the non VAT trader will want you to buy the materials to keep them under the threshold - that can cause issues with co-ordination, timing, liability in a later dispute, etc.
No rights or wrongs in essence, just be aware of the potential issues.
Mr Pointy said:
Yes I do now. I saved a fair bit with using an electrician & a plasterer who were not VAT registered.
I was talking to a plumber I know (not VAT registered) down the pub and he told me if he needs money and thinks the job will pay cash he will bump the price up 20% and then say I'll do it without the VAT and puts the price down to what it would be anyway. The customer thinks they are getting a deal he gets the job and can even declare his tax if he wants.Edited by PAULJ5555 on Wednesday 12th June 13:35
Lotobear said:
Often the non VAT trader will want you to buy the materials to keep them under the threshold - that can cause issues with co-ordination, timing, liability in a later dispute, etc.
Always lol. If someone non vat registered is happily using say 5k of their yearly allowance in supplying materials the mark up on there will be large enough to make it worth the usage of allowance.... Assuming you’re dealing with someone that has sense.... that or it’s the end of the tax year.PAULJ5555 said:
I was talking to a plumber I know (not VAT registered) down the pub and he told me if he needs money and thinks the job will pay cash he will bump the price up 20% and then say I'll do it without the VAT and puts the price down to what it would be anyway. The customer thinks they are getting a deal he gets the job and can even declare his tax if he wants.
It works in making the customer pay quickly too , usually on completion in full , that's the main reason I used to do it !!! Edited by PAULJ5555 on Wednesday 12th June 13:35
PAULJ5555 said:
Mr Pointy said:
Yes I do now. I saved a fair bit with using an electrician & a plasterer who were not VAT registered.
I was talking to a plumber I know (not VAT registered) down the pub and he told me if he needs money and thinks the job will pay cash he will bump the price up 20% and then say I'll do it without the VAT and puts the price down to what it would be anyway. The customer thinks they are getting a deal he gets the job and can even declare his tax if he wantsPAULJ5555 said:
Im not talking about doing it for cash so you dont have to pay the VAT, thats illegal.
I've recently had 3 companies round to quote for a new drive way. 2 have come in at £2000ish and the other one £1500.
All 3 are doing the same job same materials ect. I will also be there on the day just to check they dont try and put down 1" of subbase ect.
I was talking to the guy whos quote was £1500 and he said we are usualy cheaper because we are not VAT registered. Great I thought saves me £400.
I have never thought about it before but it kind of makes sense to find small companies not VAT registered to save some cash?
Does anyone else use this tactic.
Yes. The builder who did my loft conversion is not vat registered. In order to keep below the freehold, you pay the builders merchant direct. Whether he's on commission I dont know, but i couldn't buy the materials at the same price. Obviously there was Vat on the materials. VAT WAS therefore about 7% of the whole job. I've recently had 3 companies round to quote for a new drive way. 2 have come in at £2000ish and the other one £1500.
All 3 are doing the same job same materials ect. I will also be there on the day just to check they dont try and put down 1" of subbase ect.
I was talking to the guy whos quote was £1500 and he said we are usualy cheaper because we are not VAT registered. Great I thought saves me £400.
I have never thought about it before but it kind of makes sense to find small companies not VAT registered to save some cash?
Does anyone else use this tactic.
227bhp said:
Did the one quoting £1500 speak with an Irish accent and do UPVC fascias and garden clearances too?
Funny enough no. The Irish one that quoted 2K seemed more professional, clean nice work vans, even had an 0800 number and gave a 10year warrenty, he seemed to be one of the clever ones and was doing it in a way to look like a professional outfit. Maybe he is proffessional I cant say.I didnt ask him about his VAT registration.
Black_S3 said:
Best way to do it as you’ll likely be getting the quote and work done by the boss.
The counter argument I suppose is that either the company isn't very good so can't trade above the threshold, or the boss is a bit dodgy. If they're cutting corners on the tax, they're cutting corners on your house too.paulrockliffe said:
The counter argument I suppose is that either the company isn't very good so can't trade above the threshold, or the boss is a bit dodgy. If they're cutting corners on the tax, they're cutting corners on your house too.
Yeah I completely agree on that for companies providing multi skilled projects where it’s impossible they’re operating legitimately under the threshold without subbing out work as cheaply as possible for cash or bodging specialist tasks.... PAULJ5555 said:
I didnt ask him about his VAT registration.
Did you ask whether the price included VAT? Some years ago a colleague of mine got almost to the start of £40K of building work before it became apparent the price was plus VAT. And one of my neighbours had £15K of work quoted and done, and they presented a final invoice with VAT on - he refused to pay it.
On the £1500 quote the VAT would be £300 - and he'd be paying VAT on any materiela he supplied so you should only be saving VAT on the labour.
paulrockliffe said:
Black_S3 said:
Best way to do it as you’ll likely be getting the quote and work done by the boss.
The counter argument I suppose is that either the company isn't very good so can't trade above the threshold, or the boss is a bit dodgy. If they're cutting corners on the tax, they're cutting corners on your house too.I've been vat registered with a workforce of 12 and worked under the threshold as a one man band , I always delivered a better standard of work by myself rather than letting the lads get on with it . Not everyone's out to con you
paulwirral said:
paulrockliffe said:
Black_S3 said:
Best way to do it as you’ll likely be getting the quote and work done by the boss.
The counter argument I suppose is that either the company isn't very good so can't trade above the threshold, or the boss is a bit dodgy. If they're cutting corners on the tax, they're cutting corners on your house too.I've been vat registered with a workforce of 12 and worked under the threshold as a one man band , I always delivered a better standard of work by myself rather than letting the lads get on with it . Not everyone's out to con you
paulwirral said:
paulrockliffe said:
Black_S3 said:
Best way to do it as you’ll likely be getting the quote and work done by the boss.
The counter argument I suppose is that either the company isn't very good so can't trade above the threshold, or the boss is a bit dodgy. If they're cutting corners on the tax, they're cutting corners on your house too.I've been vat registered with a workforce of 12 and worked under the threshold as a one man band , I always delivered a better standard of work by myself rather than letting the lads get on with it . Not everyone's out to con you
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