Vat on quotes

[Karl Atkins]

Hi, I use software integrated in to my web site to create quotes, for b2b quotes they clearly state that prices are subject to vat at current rate, however I have had a dispute from a customer because as it turns out the software includes a column in which it states the vat as 0.00. where do I stand on this as one contradicts the other, do I have to take the hit and get the software changed going forward or am I entitled to stand my ground and insist vat is paid to me by the customer?

 

[Toby Willows]

Send all quotes in pdf format that you check before sending. Job done.

 

[Karl Atkins]

Send all quotes in pdf format that you check before sending. Job done.

Thanks Toby but that doesn't answer my question? Any further information?

 

[Stedurham]

If I got a quote with zero vat quoted I would assume you aren’t vat registered and expect you to honour it, just me opinion tho

 

[Toby Willows]

No, but it a solution which is what you need going forwards. Better still send a written quote.

 

[Stedurham]

Get software changed no brainier for me but sure if you complain and tell them it’s cost you they will do it for free

 

[Karl Atkins]

All posts appreciated but looking for the legalities of this, obviously going forward I'll make sure the 0.00 vat field is removed in one way or another but I'm trying to ascertain if legally speaking I need to take the hit on this, I have explained to the customer that asbitsba rental property he can reclaim to which he replied I'm not declaring that it's a rental property!

 

[Toby Willows]

I have explained to the customer that asbitsba rental property he can reclaim to which he replied I'm not declaring that it's a rental property!

Nope, I’m out. That it just nonsense to me. Good luck and hopefully someone knows what you are on about.

 

[Karl Atkins]

Nope, I’m out. That it just nonsense to me. Good luck and hopefully someone knows what you are on about.

It was meant to say

I have explained to the customer that as its a rental property he can reclaim vat, to which he replied I'm not declaring that it's a rental property!
.

 

[Stedurham]

You have quoted on paper zero vat stand by it or don’t upto you legally I suppose you haven’t signed a tenancy agreement or whatever you use. But the reviews from the customer and bad press probs not worth it your mistake just pay keep them sweet.
Ask software company to pay in theory their fault

 

[JEREMY HAWKE]

Your fault but if it is business to business whats the problem with them not paying the vat
Every business expects vat to be added

 

[JEREMY HAWKE]

Sorry I misconcepted my words above
What is the problem with them paying vat?

Ever price that I see from another businesses is plus vat

 

[estwig]

Your not making this very clear!

Has he booked with you and used whatever service it is you offer and therefore you have issued an invoice for goods/services supplied, if you have you might have to stand by it if you supplied a quote before commencing. By all means try it on.

If this is a quote/price/estimate for goods/services not yet supplied, then issue a revised price with an apology. Your not obliged to stand by it unless you have some funky T&C's which say you do.

 

[Karl Atkins]

Yes services have been provided for a quote that states that all prices shown are subject to vat but also in the detail of the quote shows a value for vat as 0 because at the time of quote Vat is not applied to individual parts of the quote ie materials and labour but as I said it is clearly stated that all prices are subject to vat at the current rate

 

[estwig]

That's awkward then!

Your choice to take a hit, or dig in and insist on the vat being paid.

 

[JEREMY HAWKE]

You lot have got it wrong here or as the kids say "you got it twisted"

This customer by law has to pay vat where it is due and the OP has to charge it where it is due
Its tough luck on somebody but the revenue laws must be followed and the customer has to pay
The OP does not get to make a choice what is vat applicable the vat rules dictates that for them
You made a mistake but this customer to me sounds like he started up yesterday

 

[Stedurham]

Stated vat rate is zero, so as far as I am aware business isn't vat registered. Not upto the customer to know if business is vat registered or not she stated zero vat

 

[JEREMY HAWKE]

Stated vat rate is zero, so as far as I am aware business isn't vat registered. Not upto the customer to know if business is vat registered or not she stated zero vat

But I did not write the law So the vat must be paid

 

[Stedurham]

Yes but why should the customer pay if quote says zero vat, I'm afraid that is upto the supplier to sort out not customer in my opinion

 

[Newchodge]

Without seeing precisely what the customer saw it is impossible to advise.

My initial reaction is that the customer has to pay the quote, if the quote states 0 VAT, the customer has to pay 0 VAT.

The supplier has to charge VAT and account for it, so take the hit.

 

[nelioneil]

If it's a Vatable service then VAT must be charged if the seller is vat registered. Obviously a cock up but the law is the law.

 

[Hahnbeck]

If the final total on your invoice included VAT then there is no problem - the line item showing 0.00 VAT will be irrelevant as you've stated that VAT is payable and included it in the total.

If you've actually made 2 mistakes on the invoice though (the line item showing 0.00 VAT and the total also not showing VAT or saying "£_____ + VAT") then to be fair the customer is within his/her rights to say that you've told her the total price, and you should stick to it. Just a mention of VAT somewhere in your paperwork is probably not enough, if this has been overruled twice by errors on the invoice. In that situation it would be fair to imagine the customer got the wrong impression of the total price and assumed nothing extra was payable.

The above is just based on principles of fairness though. Depending on the size of the invoice it might be worth speaking to a lawyer to see where you strictly stand on this.

 

[Pete_MK]

I purchased goods online, the prices were advertised as including VAT, the totals appeared showing VAT, the invoices showed VAT, the company used a top brand accounting/purchasing software.

I made several purchases over a year & then received letters telling me the company had not included VAT in the final price, it had miscalculated & that the price shown/paid was the price before VAT.

I refused to pay their demands, I had paid what they had advertised/invoiced (contract), on time each time. My decision to buy, was based on the price I saw on the screen, it was the best price (for obvious reasons after the event). I couldnt return the consumable items, but I could have shopped elsewhere if I had seen different prices. The onus to offer the goods or services at the correct final price lies with the seller.

They stopped asking for the extra payment.

I believe the onus on paying the VAT (from the sum paid) to the revenue falls on your shoulders, not your customer unless you want to declare it as a bad debt & can afford legal fees & stress to recover it, whilst trying to negate any bad reviews.

 

[deanpunchard]

They stopped asking for the extra payment.

And I bet you didn't think twice about walking away for using them again?


This scenario (quote too low, end up over delivering) is a common occurance. The amount of jobs I've done that have been twice as long as they should have, because something is more difficult than expected, or the suppliers have increased their prices without informing me, is quite amazing, especially in the early days.
However I would never go back to the client and say "sorry I cocked up, the bill is actually 20% more". If I did, I would lose that client, or at least give them a very good excuse to look elsewhere. Just because the invoicing software cocked up, don't pass this onto your client. In your situation, I would pay the VAT personally, suck it up, and put it down to experience.

If you're clever, you'd try to turn a negative into a positive. Explain to your client what has happened, say you'll take the hit as you want to build a good relationship with them, and in future you'll be clearer on the total costs. They might just respect you a little more for that. By demanding 20% you're burning bridges

 

[cts1975]

I'm afraid you will have to take the hit.
May be you could declare the VAT as a debtor on your VAT return? I'm sure there is a way.
And then you have businesses that are VAT registered but supply at 0% rated.
We charge VAT at 0% on our invoices for some vehicles but 20% for others.
Causes no end of confusion.

 

[Pete_MK]

And I bet you didn't think twice about walking away for using them again?


This scenario (quote too low, end up over delivering) is a common occurance. The amount of jobs I've done that have been twice as long as they should have, because something is more difficult than expected, or the suppliers have increased their prices without informing me, is quite amazing, especially in the early days.
However I would never go back to the client and say "sorry I cocked up, the bill is actually 20% more". If I did, I would lose that client, or at least give them a very good excuse to look elsewhere. Just because the invoicing software cocked up, don't pass this onto your client. In your situation, I would pay the VAT personally, suck it up, and put it down to experience.

If you're clever, you'd try to turn a negative into a positive. Explain to your client what has happened, say you'll take the hit as you want to build a good relationship with them, and in future you'll be clearer on the total costs. They might just respect you a little more for that. By demanding 20% you're burning bridges

Actually I carried on using them, providing the price/service combination was what i wanted. If they had hounded me, no I wouldnt, but I did explain to them in a letter why I wouldnt accept a back dated charge.

On occasion I/we have not charged what I/we should & if I havent delivered the product/service I tell the customer, most have no issue paying (small spends in our case), some say no & I dont push it, I make it clear it was our mistake, I could give them there money back & tell them to sling their hook, but it wouldnt help my bottom line.

VAT is the bane of my business, in retail food hot/cold/onsite/delivered/catered - its a minefield, made worse by those who dont declare VAT due until the order is placed, particularly one high street clothing/food chain, that gives them a sweet looking price edge compare to our VAT inclusive prices.