Dispute with client over payment

[feartheclaw]

Hi all
I am a self employed sales consultant involved with a dispute with a client I am contacted to sell for. The situation arose when they were unable to reclaim VAT paid to me for work done last year. Because of this I was paid no VAT on my invoices this year with the ongoing promise that VAT would be paid as soon as their VAT situation was sorted out. The company are now properly registered for VAT and can reclaim for 2017 but not for 2016 so apparently taking a hit on that.
They have said they agree this VAT is owed to me. Now they are looking to claw back payments made to me for work I had done this year but they say was not satisfactory and are saying they are unhappy with level of sales for 2017. Coincidentally the amount is almost exactly the same as the total VAT figure owed to me (circa €5k). They say "we would not be having this conversation if sales were higher" but I feel it is motivated by their inability to reclaim vat from last year. Should I go down the legal route or what are my options? I have been asked to put together a sales plan for them for 2018. It is a messy situation with a difficult client - am I best to walk away? Any advice appreciated..
Thanks,
FTC

 

[dublin67]

Non-payment of vat is exactly the same as your invoice not being paid. A clients vat reclaim situation is nothing to do with you and is their problem entirely. Obviously the fees you charged them included vat and they agreed to that.
I would threaten them with the Revenue and see what happens. My view is that the Revenue may not be interested in getting involved. In any event they won't and can't discuss another taxpayers case with you for reasons of privacy. You may need to amend your own vat returns - the amount you received will be vat inclusive and you'll need to pay vat on that basis. I'm assuming you are working on the cash receipts basis.

As regards legal action firing them a solicitors letter may be helpful. However the remedies available in this country for debtors seeking to recover the money owed to them aren't great. I would imagine that either approaching the Revenue or legal action will cease your business relationship with the client and this may be a blessing if you can afford to do without their business. My personal view is that I wouldn't make life too easy for them and I would pursue both avenues if you can. Life is too short without having to deal with bad clients and these obviously haven't kept their word.

If you want to mess with their head file a data protection request (assuming you are trading as an individual) and request to see all personal information that they have on you. If they don't respond file a compliant with the Data Protection Commissioner and see what happens. This is only for recreational purposes and only costs €6.35.

 

[Gordon Gekko]

Good advice there; I would threaten to report them to Revenue (pure bluster but it might work).

And I would start the process of dumping them as a client.