Reduced VAT rate for building refurbishment works.
Discussion
I am presently engaging a building contractor to carry out refurbishment works on a residential property that has been unoccupied for more than two years, the same that therefore enjoys a reduced VAT rate for the building costs of 5% VAT.
The building contractor is submitting suppliers and sub-contractors charges (no invoices supplied), the same showing plus 5% VAT, with some of those suppliers invoices being inclusive of 20% VAT.
What is the correct way for the contractor to be billing me at the reduced 5% VAT, is it by arriving at the contractor’s suppliers/sub-contractor’s exclusive 20% VAT amount, then billing me plus the reduced 5% VAT rate. I have the suspicion that the contractor might be adding 5% Vat on his supplier’s/contractor’s inclusive 20% VAT invoices.
The building contractor is submitting suppliers and sub-contractors charges (no invoices supplied), the same showing plus 5% VAT, with some of those suppliers invoices being inclusive of 20% VAT.
What is the correct way for the contractor to be billing me at the reduced 5% VAT, is it by arriving at the contractor’s suppliers/sub-contractor’s exclusive 20% VAT amount, then billing me plus the reduced 5% VAT rate. I have the suspicion that the contractor might be adding 5% Vat on his supplier’s/contractor’s inclusive 20% VAT invoices.
The contractor charges you what he thinks the economic value of the work is he does for you - and then adds the appropriate VAT rate for that work.
How he handles the VAT he is charged by the suppliers from whom he buys materials is his business as they are his costs, not yours.
If you think he is charging you too much, that is an economic argument, not a VAT argument.
How he handles the VAT he is charged by the suppliers from whom he buys materials is his business as they are his costs, not yours.
If you think he is charging you too much, that is an economic argument, not a VAT argument.
Wings said:
The building contractor is submitting suppliers and sub-contractors charges (no invoices supplied), the same showing plus 5% VAT, with some of those suppliers invoices being inclusive of 20% VAT.
I have the suspicion that the contractor might be adding 5% Vat on his supplier’s/contractor’s inclusive 20% VAT invoices.
If no invoices are provided why do you think he is charging 5% VAT on top of a VAT inclusive figure?I have the suspicion that the contractor might be adding 5% Vat on his supplier’s/contractor’s inclusive 20% VAT invoices.
What is in your contract with regard to supplies?
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