Painter's estimate says (no vat) not (inc vat) or (exc vat) - customer thinks no vat is payable - any advice?

Question

We've got this painter doing the wooden window frames on our house. His estimate gives the price followed by (no vat). Our landlady organised the work but she's not very savvy and doesn't ask the right questions. We're quite friendly with her and don't want to see her ripped off. She agreed with the painter to pay half the cost up front. She has paid half the amount given on the estimate. She thinks that (no vat) means that there will be no VAT added (i.e. no VAT payable), but she hasn't clarified this explicitly with the painter and, as most of you know, tradesmen seldom work that way.

Given that this guy didn't used recognised language - do you think our landlady will have a leg to stand on if she doesn't agree to pay VAT on top of the estimate price?

Thanks for any advice.

Answer 1

For a contract to tke effect there must be
Offer
Acceptance
Consideration (ie price)
Consensus Ad Idem (ie of same mind or mutual agreement as to what the contract is about)
Intent to create legal relations

All of these seem satisfied so you have a contract

The question is now of what is the price agreed. The key issue for a dispute is what would a third party agree as ultimately if this is to be settled it will happen in a civil court where the burden of proof will be that of the balance of probabilities.

There would appear a number of arguements in your landlady's favour.

1. If 50% of the money is to be delivered upfront and this amount excludes VAT it would imply that the 100% of the price will also exclude VAT. Did she get a receipt this would support her case

2. If the painter is registered for VAT the VAT point or time that VAT is due is the earlier of receipt of funds or issue of invoice. Hence if the painter is VAT registered he should have issued a VAT invoice on receipt of cash. The fact he did not will support your point that your belief was that no VAT would be charged.

3. The fact that the painter put no VAT as opposed to Price excludes VAT would prima facie indicate that no VAT is due

4. It may well be that the painter is not actually registered for VAT. VAT registraion is only obligatory should the painter's registered turnover exclude approx GBP 60,000. if the painter is not registered for VAT no VAT will be due.

5.If the painter is registered he should be able to supply a copy of his VAT registration certificate and all invoices should include his VAT registration number.

Answer 2

She needs to clarify it with the tradesperson. Since an estimate is just that, an estimate, the eventual cost can differ a fair amount, providing the trades person can show the workings and the costs of materials plus labour. The only reason VAT would not be payable is if the tradesperson's business is too small to be registered for VAT.

The tradesperson has simply made a typing error and given that it is an estimate and not a bill, the final bill will probably rectify this error and show the VAT amount. Your landlady would find it hard to fight this on a small typing error. I would say the best thing she can do is speak to the tradesperson and state that the typing error has caused confusion and that she'd like him to re-issue the estimate with the correct term, and the VAT rate on it. I'd also suggest due to the confusion she ask for some form of discount. Also, if the workmanship isn't up to scratch she could ask for the VAT to be discounted - I did this on my CD duplication and printing because the product wasn't up to scratch and they waived the VAT in view of the problems.

Hope this helps.

Answer 3

If he's not charging the VAT then he's trying to get payment for cash and get away with a tax dodge. The catch is she will have to pay in cash. Cheque will not be acceptable to him. A lot of tradesmen do this they will quote a cheaper price without VAT so they can pocket the cash and not declare it in their accounts or to the tax man as profit. The only person who will be in trouble is the painter because he could be reported to the inland revenue for tax evasion.

Answer 4

Sounds like this guy has worded his estimate VERY badly. The terms "ex. VAT" or "inc. VAT" should have been used. It might be worth asking him to prove that he is VAT registered (show his VAT Registration certificate), if he is not, then he cannot charge VAT, if he is VAT registered then he can charge it, but he needs to word his quotes and invoices better!

Answer 5

sorry to sat but novat means no vat has been added not that there will not be any vat ask her to ask the painter to clarify on the receipt and go from there he may well recognise this was partly hes fault and come to some arrangement on the bill hope this helps

Answer 6

VAT - Value Added Tax

I would think no VAT would mean not included rather than not be billed any.

All work I have had done, I always have to pay VAT unless I pay cash and then occassionally I don't have to pay any VAT (as they don't declare the work to the tax man).

Answer 7

He won't be VAT registered and will probably just be self employed. Ask to see his CIS card and proof that he is paying his stamp. To be VAT registered your company has to turn over £45 or £65 k per year and i doubt he does.

Don't pay the VAT until you see his VAT registration number, if he hasn't got one then you don't have to pay it!!!

I

Answer 8

i think most people in the uk except charities and the government have to pay vat the fact it is not on the bill and it says no vat prob means the percent will be added onto the final payment.
sorry!

Answer 9

I'm sorry, I'm not familiar with the term "vat," so I may not be answering correctly.... but I would assume that if my bill said "no vat" that it meant that the person wasn't going to provide that in their service, whatever that may be.

Answer 10

Depends whether it's cash in hand - in which case no VAT will be paid as he's defrauding the Inland Revenue!