Charging VAT in the middle of a contract

Discussion in 'General Business Forum' started by bluefishcs, Jan 10, 2019.

  1. bluefishcs

    bluefishcs UKBF Newcomer Free Member

    16 2
    Hello,

    A magazine company agrees to place an advert for a client at a cost of say £100 a month for 12 months, the client pays the company each month.

    Part way through this contract the magazine company becomes VAT registered, can they start to charge VAT on top of the £100 to the client or must they make the total up to be £100 still inc VAT?

    The client is not VAT registered and so is not keen on now having to pay the extra VAT themselves.

    There was no mention of VAT either being excluded or included at the beginning of the contract.

    Thanks.
     
    Last edited: Jan 10, 2019
    Posted: Jan 10, 2019 By: bluefishcs Member since: Mar 10, 2013
    #1
  2. Mark T Jones

    Mark T Jones UKBF Big Shot Full Member

    3,025 858
    What does the contract say?

    Usually quotes will state ‘excluding VAT’ which then provides the option to add VAT
     
    Posted: Jan 10, 2019 By: Mark T Jones Member since: Nov 4, 2015
    #2
  3. bluefishcs

    bluefishcs UKBF Newcomer Free Member

    16 2
    No formal contract just an email to say the cost will be £xx.xx for another year. No mention of VAT at all.
     
    Posted: Jan 10, 2019 By: bluefishcs Member since: Mar 10, 2013
    #3
  4. Noah

    Noah UKBF Ace Free Member

    1,127 282
    Looks like a classic case of problem-shifting to me. Going to VAT-registered is their problem; they would like it to be your problem.
     
    Posted: Jan 10, 2019 By: Noah Member since: Sep 1, 2009
    #4
  5. bluefishcs

    bluefishcs UKBF Newcomer Free Member

    16 2
    So is it fair to say if they agreed £100 a month for a year without any mention of VAT the magazine company can't add VAT on top of the £100 halfway through the term just because they become VAT registered?
     
    Posted: Jan 10, 2019 By: bluefishcs Member since: Mar 10, 2013
    #5
  6. Mr D

    Mr D UKBF Legend Free Member

    14,288 1,557
    Sounds like effectively changing the contract. You have one, just very basic.

    What happens if the customer carries on paying £100 a month while the magazine charges £120 a month?
     
    Posted: Jan 10, 2019 By: Mr D Member since: Feb 12, 2017
    #6
  7. bluefishcs

    bluefishcs UKBF Newcomer Free Member

    16 2
    I guess legally then the magazine can't do anything about it, but could just stop the customer advertising again after the contract is finished which might not be in the customers interest.
     
    Posted: Jan 10, 2019 By: bluefishcs Member since: Mar 10, 2013
    #7