Not Vat registered , Client won't pay me.

S

Sharko

Guest
I have just started out as a sole trader and my earnings for this year won't go over the Vat limit.
I am not going to register for vat untill next year.

I have just done some work for a client, who is now refusing to pay as I am not Vat registered.
He is saying that his company can't pay me unless I am Vat registered.
Is this correct? It is a private company that I am dealing with.

What should I do?
Thanks In Advance!!!
 
There should be no problem here. Vat registration number is only required if you are charging vat - presumably ure not!
Some accounts software is set up to require a vat number for processing, but there is no legal requirement of you to charge vat.
 
Sharko - the customer may have a policy of only dealing with VAT registered suppliers. This would be a coporate policy though, not a legal requirement. If this was the case he may have assumed you were VAT registered and forgot to notify you of the requirement.

Did you actually charge VAT on the transaction ? If you did, then he is correct(ish) or more accurately - you are wrong in that you cannot charge VAT if you are not VAT registered.

z
 
Hi Guys
Thanks for the quick response.
At no stage did I tell him I was Vat registered and I don't charge any or claim back any Vat.
I am just starting out so I don't want to get into the Vat circle untill next year.
I got the feeling that he just wanted me to add Vat to the invoice which I refused to do.
The amount isn't even that much.
Thanks
 
Your probably dealing with a business who's policy is to put off payments till they absolutely must pay them - these clients can be more hassel than their worth. My advice is to bring them to the small claims court, but first send them a letter letting them know that this is your intentions.
 
I dont know if you could just raise an invoice for the gross amount (including the notional vat value), and say ' vat inclusive price'. The fact that you are adding zero vat to invoice should not get you into any revenue trouble - but check this out.
 
runner said:
I dont know if you could just raise an invoice for the gross amount (including the notional vat value), and say ' vat inclusive price'. The fact that you are adding zero vat to invoice should not get you into any revenue trouble - but check this out.
Click to expand...
don't do that.

It sounds like the company found out you are not vat registered and said, heres a newbie,amature etc.. lets not pay him or at least put it off for as long as we can.
Companies will never pay for anything until they absolutely have to.
You did the job they owe you the money they have to pay.

Did you send them a quote or invoice before you took the job?

If I was the company and I was trying what they are, if you kept hassling me for the money I would pay, but I would say I assumed the figure you quoted me included VAT at 21%. I want a discount to cover the amount I could have reclaimed from the revenue.

There just playing hardball keep at them until they pay.
 

It's normal practice in business to quote the VAT-exclusive price, so that wouldn't hold up.
 
I don't think it's that simple folks.

Some employment agencies have been audited by the Revenue for paying contractors on simple invoices. The Revenue have insisted that they are employees and that the amount was a net amount and should be grossed up for PAYE and PRSI.

Most employment agencies now insist that anyone who is not paid via the PAYE system is VAT registered or works via a limited company. However, they would explain this upfront in the contract letter.

Brendan
 
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