VAT issue

[bensd]

I bought a domain 3-4 weeks ago from a company; I paid and it was transfered all smoothly.

They have only just got back to me to say I haven't paid the VAT and could I transfer it ASAP.

During the negotiations VAT was never mentioned once - I spoke to 2-3 people during the negotiations/payment/transfer and it was never said the amount agreed was + VAT.

When they emailed me the invoice they put the bank details on their email so I never even looked at it. I have now checked the invoice and it is for the agreed amount + VAT.

Do they have a leg to stand on to try and claim the VAT from me?

 

[Aegean]

Are they an established VAT registered company, and do they have a website which shows they are VAT registered?

Perhaps the thing to do is get some proper legal advice from your solicitor before you pay anything.

 

[monaghan]

If the invoice was issued prior to transfer, then I'd suggest it was your error, however, I'm surprised they released the name if there were funds outstanding on the transaction.

Looks like both sides were not paying full attention. I guess it is time to negotiate again! If it was a small amount I'd just write it off rather than chase a customer after my error.

 

[fenland]

Firstly I assume you are not VAT registered?

How did you know how much to pay them? Did you look at the invoice or just transfer an amount based on discussions?

You say you spoke to people and the agreed amount was "+VAT". This is distinct to "including VAT" so based on your post I would say they are correct.

 

[retired_member33]

Not sure how this works in The UK, but can't you claim back VAT?

So pay now and get it refunded when doing your tax claim?

Would rather do that then wasting my time on sollicitors and legal advice.

 

[bensd]

Are they an established VAT registered company, and do they have a website which shows they are VAT registered?

Perhaps the thing to do is get some proper legal advice from your solicitor before you pay anything.

They are VAT registered and they do have a website however, the website doesn't refer to VAT or give a VAT number.

If the invoice was issued prior to transfer, then I'd suggest it was your error, however, I'm surprised they released the name if there were funds outstanding on the transaction.

Looks like both sides were not paying full attention. I guess it is time to negotiate again! If it was a small amount I'd just write it off rather than chase a customer after my error.

IMO they should have checked the payment before sending the transfer. The VAT is only £200 so not HUGE in the scheme of things however, I'm not just going to give it up immediately (if at all) out of principal.

I have emailed them back with my view on things so will wait an see how they reply.

 

[bensd]

Firstly I assume you are not VAT registered?

How did you know how much to pay them? Did you look at the invoice or just transfer an amount based on discussions?

You say you spoke to people and the agreed amount was "+VAT". This is distinct to "including VAT" so based on your post I would say they are correct.

Sorry that was a typo - VAT was never ever mentioned until now.

The figure was just agreed on, which I paid however, so the invoice for figure+VAT.

Not sure how this works in The UK, but can't you claim back VAT?

So pay now and get it refunded when doing your tax claim?

Would rather do that then wasting my time on sollicitors and legal advice.

I'm not VAT registered so I can't claim it back

 

[nick-harper]

Did they not have a vat breakdown on the invoice? Like before and after vat prices and the amount of vat?

 

[monaghan]

I'm not VAT registered so I can't claim it back

You can register for VAT even if you don't hit the turnover threshold, probably too late for this event though.

 

[bensd]

Did they not have a vat breakdown on the invoice? Like before and after vat prices and the amount of vat?

The invoice was for the agreed amount + VAT however, they gave me payment details so I just sent payment for the agreed amount.

 

[rob]

Was invoice sent before or after transfer?

 

[Bailey]

I agree with monaghan. If you were in possession of the invoice-for-payment AND it included the VAT charge as an amount, prior to you making payment. Then very hard to see how you can or should withhold.

But on the other hand given it was negotiated as inclusive (to your mind) I would agree to pay half and ask them to recalculate and reinvoice.

 

[cm1975]

If you agreed a price, then I would say it's their problem for not explicitly saying whether it included or excluded VAT. Whether the invoice said differently, should not matter, as the deal was agreed prior to this.

It would be interesting to know if you approached them as an individual, or as a company. ie. Was it reasonable for them to make the assumption that you would be VAT regged.

 

[Edwin]

AFAIK if they're VAT registered then their invoice HAS to include the VAT broken out separately, and also the total including VAT (and that's what you should have paid them). It also should have their VAT number on it.

 

[bensd]

The invoice was provided prior to transfer however, I never even looked at it as they provided their payment details in the invoice.

In my mind we had already agreed a price. If they are VAT registered then they should have invoiced with the agreed amount as a gross figure.

 

[rob]

Would say suck it up in that case.

Not ideal but from their pov they invoiced fully, then you sent name.

Hope its not too much of a wodge!

 

[jasman]

The invoice is the formal request for payment so I would say if the invoice says VAT is to be added, then that is the deal that was offered officially. However I would think an invoice has to be arranged in a particular way to be valid. If the VAT amount and/ or total amount were omitted from the invoice and it just said the ex VAT amount with "+VAT" next to it, perhaps it would be invalid, I'm not sure.

 

[cm1975]

It would be interesting to know if you approached them as an individual, or as a company. ie. Was it reasonable for them to make the assumption that you would be VAT regged.

I've been looking at the CAB website about this and it could depend if they are selling to you the individual or you as a company. If they are selling B2B then, they do not have to display VAT on prices . . . Or something similar to that effect.

 

[bensd]

I've been looking at the CAB website about this and it could depend if they are selling to you the individual or you as a company. If they are selling B2B then, they do not have to display VAT on prices . . . Or something similar to that effect.

Thanks Calum, do you have a link to that page?

 

[cm1975]

Thanks Calum, do you have a link to that page?

http://www.adviceguide.org.uk/engla..._with_price_or_payment_e/pricing_problems.htm

- There are possible points for and against on this page, but under the section "Displaying Prices" it says "Traders must clearly show the selling price inclusive of VAT, except when selling to businesses."