# Is it totally necessary to include a VAT no. on invoice?



## pennyboy1001 (6 May 2008)

Hi all,
       I'm in the transport sector but by chance got a little side project making shuttering in the construction sector. The company i'm doing it for say they require a VAT number but I don't have one. Can I just put in a bill with no VAT?. The accounts guy there insists on it (he's a bit funny). I dont know if it is just because he wants the payment to be just like the rest of the bills and it would be a bit more complicated for him to process.
If i just put in final price with no VAT on top, what can they do?
Penny


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## DavyJones (6 May 2008)

AFAIK, you don't have to be VAT reg if your turnover is below a certain amount, I think about €35,000 pa. if your under that you can choose to become registered or not. Remember its a rolling 12 months and 35k isn't a lot really.


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## pennyboy1001 (6 May 2008)

thanks for reply Davy,
Yes, it is 27,500k per annum, but i'm wondering why he's insisting.Is it just because he's used to dealing with bigger clients that would obviously be earn above this level? The amount of VAT we're talking about is about 2000E. The problem as i see it is that they want to be able to claim this back. It should be ok to put bill in with no VAT included,no?
Penny


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## ButtermilkJa (6 May 2008)

It shouldn't make a difference to them if there is VAT on the invoice or not (unless the accountant is uncomfortable having to deal with anything he is not used to?).

If they want to 'claim' VAT against expenses they already have they can still do this regardless of whether anybody charges charge it or not.


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## DavyJones (6 May 2008)

I think the problem is a tax one.  if someone is vat registered and then does  work for a contractor, they will need a C2, a form of tax clearence. If the sub contractor doesn't have a C2 but is just VAT reg, the contractor is obliged to withhold 35% of the total bill and send it off the the inland revenue. The contractor then gives the sub contractor a deduction cert stating the amount withheld. The sub contractor can then reclaim that amout from the revenue. Its making the revenue aware that the contractor has done there part and its up to the sub contractor to pay their own tax.
Worked in UK for many years without a VAT no and only once I had to give a company a signed letter from accountant and I to state that I was paid gross and was responible for my own taxes.
This may be the issue, talk to your man to find out.


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## ubiquitous (6 May 2008)

DavyJones said:


> I think the problem is a tax one.  if someone is vat registered and then does  work for a contractor, they will need a C2, a form of tax clearence. If the sub contractor doesn't have a C2 but is just VAT reg, the contractor is obliged to withhold 35% of the total bill and send it off the the inland revenue. The contractor then gives the sub contractor a deduction cert stating the amount withheld. The sub contractor can then reclaim that amout from the revenue. Its making the revenue aware that the contractor has done there part and its up to the sub contractor to pay their own tax.



Sorry, I don't see the connection between RCT and whether or not the OP is VAT-registered. RCT is administered independently of the VAT system and its application or otherwise does not depend in any way on VAT registration or exemption.


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## Flax (6 May 2008)

I used to work in accounts. I would say the problem is the accounts person does not fully understand what he is doing. Ask him why he needs a VAT number.


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## Graham_07 (6 May 2008)

They will have a number of purchases/expenses without VAT, e.g. rates, insurance, they do not get a VAT number for those, so a non-VAT registered supplier should be no different. YOu invoice them with no mention whatsoever of VAT. It goes in as a zero% purchase with no VAT claim on it. End of story.


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## DavyJones (6 May 2008)

ubiquitous said:


> Sorry, I don't see the connection between RCT and whether or not the OP is VAT-registered. RCT is administered independently of the VAT system and its application or otherwise does not depend in any way on VAT registration or exemption.


 
Fair enough, So would the OP be expected to get a RCT as they are now acting as a sub contractor to the main contractor?


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## Domo (6 May 2008)

Whether they are inside RCT will depend on whether the work they are carrying out is considered to be "construction works" as defined by the Revenue.

They should seek professional advice in this regard.  However, it is really up to the Contractor paying them to ensure that they are operating RCT correctly also.

If required, they will probably request the relevant RCT forms (but no guarantee of that)


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## Megan (6 May 2008)

pennyboy1001 said:


> thanks for reply Davy,
> Yes, it is 27,500k per annum, but i'm wondering why he's insisting.Is it just because he's used to dealing with bigger clients that would obviously be earn above this level? The amount of VAT we're talking about is about 2000E. The problem as i see it is that they want to be able to claim this back. It should be ok to put bill in with no VAT included,no?
> Penny



Would the problem here be that the company thinks the €27,500.00 is inclusive of VAT and that they should be able to claim back the VAT  element of the Invoice. Did you make it clear when you priced the job that your figure was ex VAT?
I cannot figure out where you get the €2000 for VAT. What rate of VAT are you talking about?


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## pennyboy1001 (6 May 2008)

Thanks for replies all,
       The 27,500 is the new amount you can earn on goods without getting invloved in VAT. I sent in a quote of around 9000E(excluding VAT). They are querying why it is not 10,890E(figure with 21% incl, 2000k roughly).
I agree with Flax, i think the guy in accounts does not totally understand it.
Penny


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## Satanta (6 May 2008)

pennyboy1001 said:


> I agree with Flax, i think the guy in accounts does not totally understand it.


I think VAT is something that a lot of people struggle with. 

I've had calls from more than one accounts deparment informing me of _'errors'_ in invoices...
"Ohh, by the way, you've a mistake there. VAT is 21%, where did you get this 13.5%?"


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## mathepac (6 May 2008)

Satanta said:


> ...
> "Ohh, by the way, you've a mistake there. VAT is 21%, where did you get this 13.5%?"


And your answer was...?


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## Satanta (6 May 2008)

mathepac said:


> And your answer was...?


That the 13.5% VAT rate applies to most contractors operating in the building sector and construction work generally.... which lead to an "ohh yeah, I think I've seen that before"... from an accounts department (one really stands out, but there were two other occasions when this has happened) which deals with a significant amount of construction work. Far from the original point, but it does highlight that VAT does tend to cause a little (or lot of) confusion.


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## NHG (7 May 2008)

21% vat supply only - 13.5% vat supply and fit


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## Graham_07 (7 May 2008)

NHG said:


> 21% vat supply only - 13.5% vat supply and fit


 
And to complicate it further, supply & fit may be 21% and not 13.5% in cases of for example electrical appliances supplied & fitted with kitchens.

VAT continues to be one of the most problematic areas of taxation for many businesses and the one where the greatest possibility of error occurs.


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## ubiquitous (7 May 2008)

Graham_07 said:


> VAT continues to be one of the most problematic areas of taxation for many businesses and the one where the greatest possibility of error occurs.



Indeed. It is also the most commonly evaded tax. A dog's dinner of a system if you ask me.


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## Purple (7 May 2008)

Megan said:


> Would the problem here be that the company thinks the €27,500.00 is inclusive of VAT and that they should be able to claim back the VAT  element of the Invoice. Did you make it clear when you priced the job that your figure was ex VAT?
> I cannot figure out where you get the €2000 for VAT. What rate of VAT are you talking about?


I have never quoted inclusive of VAT. I don’t know any business to business supplier who does.


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## Megan (7 May 2008)

Purple said:


> I have never quoted inclusive of VAT. I don’t know any business to business supplier who does.



I have dealt with plenty of business who tried to say VAT was included in price - that is when I am trying to get payment. Some people would do anything (well nearly) to get afew euro knock off an Invoice.


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## Purple (7 May 2008)

Megan said:


> I have dealt with plenty of business who tried to say VAT was included in price - that is when I am trying to get payment. Some people would do anything (well nearly) to get afew euro knock off an Invoice.


As long as your terms and conditions state that prices are subject to VAT where applicable then they don't have a leg to stand on.


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