Buying Appliances with Builders VAT Number

R

RobG

Guest
I'm currently building a new house, and a number of people have told me I can use my builders VAT number when buying kitchen appliances in the North to avoid paying UK VAT. So who do I pay the VAT to? Wouldn't the builder have to charge me 23%, so I'd be worse off?
 
Its a scam. You cannot use your VAT number to avoid paying VAT on personal purchases. The first thing an auditor will do in the event of an audit is check these purchases and they will have a complete listing coming to the audit. You will be charged, penalised and interest will apply.

As an aside IMO the Irish revenue should have a unit dealing specifically with these purchases. But as usual funding will not be given for such a unit. I have spoken to local inspectors. No staff have been appointed to replace retiring employees. This has created even more pressure and as a result more staff are resigning. As a result audits are backlogged and some inspectors see no end to the problem. What short term stupidity. The country is losing millions as a result and tax cheats are getting away.
 
simplyjoe said:
Its a scam. You cannot use your VAT number to avoid paying VAT on personal purchases.
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SimplyJoe, I think you should change your name to Angry Joe!. Let me reiterate the questions though since you seem to have misread the original post.

1. I don't have a VAT number. The Builder currently building my house has one, so I'd be using that.

2. I'm asking how to legitimately pay the VAT. Obviously its not a scam if businesses in the North allow you to purchase exclusive of UK VAT, my question is by what process does that VAT get paid.

3. Per other post, I'd be interested in if this route means I get 13.5% VAT rather than UK rate. e.g. I assume if you buy a new apartment with a kitchen fitted you aren't paying 23% for the appliances (? maybe?), so why would my situation be different if that was the case.
 
First of all I think you need to clarify your thought process.

Either you OR your builder can purchase the appliances in the North

If you buy the appliances you are subject to UK vat on purchase.
If your builder purchases the goods, then the vat supply can be zero rated, however the builder must then invoice you for the goods plus Irish vat.

Your options as a person not registered for vat is to either pay the UK vat or pay the
builder, Irish vat.

Anything else is illegal.
 
Thanks, makes sense, and so what VAT rate would the builder need to charge me for these items, if they were to be included in the price for the new build?
 
RobG said:
if they were to be included in the price for the new build?
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I'd select what appliances you want, along with make and model etc - Get prices yourself, to compare, and let the builder come back to you with his price.
If he can scam something, its not your problem, its his.
He may know somebody that will do a deal with him if he is buying all appliances from one supplier.

Or if he breaks out the appliances in one quote, then you do your research, you may get a better deal - There are plenty of suppliers in the north that would deliver down here.
 
Rob - sorry I misread the question!! The builder can charge you 13.5% providing he can prove that the supply of the goods is part of the overall supply of the service. For example I feel that the contract (if one exists) would need to state something along the lines of 'for the construction of the house at .. including the supply and fitting of all kitchen and utility room equipment.' There would need to be one price quoted for the overall job. If the supply and fit of the equipment is mentioned seperately or is quoted seperately I feel the builder should charge you the full 23%. If not on the contract or original quote and this is an 'extra' again I feel the builder should charge 23%. But as aforesaid that's his problem not yours. In effect he would have to prove that the supply of the equipment was all part of one job, that the supply of the equipment was essential to fulfill the contract.
 
I think the builder should invoice you at the 23%.
Otherwise in an audit most of his purchases are at 13% and invoices at the higher rate would attract questions, as they would appear in a different column.

I know of lots of builders who do what you suggest though!
 
browtal said:
I think the builder should invoice you at the 23%.
Otherwise in an audit most of his purchases are at 13% and invoices at the higher rate would attract questions, as they would appear in a different column.

I know of lots of builders who do what you suggest though!
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Most of a builders purchases would actually be at the standard rate!

Anyway the rate of his purchases is irrelevant in this context; all that is relevant is what rate he should be charging on his supply to the OP, and that would be the standard rate, unless it's very clear in the building agreement that specific appliances are also to be supplied under the agreement. And even then it could be argued against by Revenue, on the basis that it is a multiple supply rather than a composite supply...http://www.revenue.ie/en/tax/vat/leaflets/mixed-supplies-goods-services.html
 
browtal said:
I think the builder should invoice you at the 23%.
Otherwise in an audit most of his purchases are at 13% and invoices at the higher rate would attract questions, as they would appear in a different column.

I know of lots of builders who do what you suggest though!
Click to expand...
2/3 rule can kick in if he includes in his overall "house build" invoice
 
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