OT(ish) - VAT registration - one for the builders

[David WE Roberts]

We are currently getting quotes from builders to do the major work on
remodelling the back of our house.
We plan for some DIY involvement but tearing the rear ground floor wall off
the house and leaving the upstairs hanging on some variety of sky hook is
not within our current ambitions.

First one has come in, and was {cough} how much?
The builder is VAT regitered and the VAT was {COUGH -HOW MUCH?}.

We had another builder round to quote, who hasn't yet got back to us with a
quote but he also passed the details onto a mate (checked with us) who came
round to see us.
This mate is not VAT registered.

Now the difference in a price, if you assume 50% labour and 50% materials,
should be about 10% of the total between non-VAT registered and VAT
registered.
This can be the difference between just affordable and not affordable.

So is there a level of job which fits neatly with a non-VAT regitered
builder, such that it gives a decent return but doesn't take them over the
limit for VAT registration, and does the building community tend to steer
the smaller non-VAT registered builders towards these jobs and keep the
bigger jobs for the VAT registered crowd?

It does seem to make sense, and our non-VAT builder did tell us that has
turned down at least one job because it would take him over the VAT
threshold.

If this idea is valid (and it does seem to make some sense) then how does
the small builder avoid VAT registration?
As I see it there are a few main ways.
(1) Take a large proportion of small jobs which keep you busy but don't
break the budget.
(2) Take larger jobs but space them out so you only work say 6-9 months of
the year.
(3) Take larger jobs but do them 'slow and steady' at a lower hourly rate
for labour to keep occupied all year and keep a steady income without the
temptation to spend the spare cash. This especially if you really enjoy the
job so wouldn't know what to do with 3 months a year off.

I am ignoring any "do a few large jobs for the accountant/tax man and boost
your take home with a steady stream of foreigners".

All in all, it seems there should be a 10% discount for using VAT
unregistered builders.
The only concern being if any decent builder will generate enough annual
turnover to have to register for VAT.

Cheers

Dave R
--
No plan survives contact with the enemy.
[Not even bunny]

Helmuth von Moltke the Elder

(\__/)
(='.'=)
(")_(")

[mogga]

On Mon, 20 Feb 2012 11:13:04 -0000, "David WE Roberts"
<nos...@btinternet.com> wrote:

>We are currently getting quotes from builders to do the major work on
>remodelling the back of our house.
>We plan for some DIY involvement but tearing the rear ground floor wall off
>the house and leaving the upstairs hanging on some variety of sky hook is
>not within our current ambitions.

What insurance & guarantees did they offer?

http://www.voucherfreebies.co.uk

[larkim]

Agree on the turnover measure - if a builder can only bill about £73k
in the year before mandatory registration, and if you assume (as you
are doing) that labour is 50% of his billing (including allowances for
employers NIC, pensions (!?), etc) then the most that he can be
extracting in equivalent salary is c. £35k. Once he has a mate
involved too, his salary would be closer to £20k; not much for the
risk of self employment, weather, rectification costs, etc etc.

Matt

[Robin]

> Agree on the turnover measure - if a builder can only bill about £73k
> in the year before mandatory registration, and if you assume (as you
> are doing) that labour is 50% of his billing (including allowances for
> employers NIC, pensions (!?), etc) then the most that he can be
> extracting in equivalent salary is c. £35k. Once he has a mate
> involved too, his salary would be closer to £20k; not much for the
> risk of self employment, weather, rectification costs, etc etc.
>

FWIW many sole traders used to get their clients to buy the materials so
the traders could quite legitimately avoid compulsory VAT registration.
The clever ones even knew the formula to recite which meant they could
legitimately buy the materials as agent for the client without the
client needing to go anywhere near a merchant - and no doubt pocket
their traders' discount :)

--
Robin
reply to address is (meant to be) valid

[Man at B&Q]

On Feb 20, 11:13 am, "David WE Roberts" <nos...@btinternet.com> wrote:

(4) Get the client to buy the materials.
(5) Get the client to engage other trades individually.
(6) Get the client to pay cash-in-hand.
(7) Lie to HMRC.

MBQ

[David WE Roberts]

"Robin" <rb...@hotmail.com> wrote in message
news:jhtgjl$2ht$1...@dont-email.me...

We are quite happy to source the materials through builders merchants - we
already have a couple of 'Trade' accounts from previous projects.
One additional way is to pay labourers directly (we discussed this with our
non-VAT man but he said that as he was not registered this didn't matter).
Two man band we are dealing with - so £20k a year is an interesting figure.
Perhaps we will have to feed him as well to keep his overheads down ;-)

[harry]

(8) Completely demolish the house & build a new one.
Obtain the paperwork to reclaim the VAT before you start. Can work
out a lot more sensible.

[David WE Roberts]

"harry" <harol...@aol.com> wrote in message
news:3a36b71a-703b-49dc...@9g2000yqo.googlegroups.com...

*(8) Completely demolish the house & build a new one.
*Obtain the paperwork to reclaim the VAT before you start. Can work
*out a lot more sensible.

So far the neighbours in the other semi seeem to be O.K. with our plans.
However I think that may be a step too far.

[The Medway Handyman]

On 20/02/2012 11:13, David WE Roberts wrote:
> We are currently getting quotes from builders to do the major work on
> remodelling the back of our house.
> We plan for some DIY involvement but tearing the rear ground floor wall
> off the house and leaving the upstairs hanging on some variety of sky
> hook is not within our current ambitions.

Wimp :-)

>
> First one has come in, and was {cough} how much?
> The builder is VAT regitered and the VAT was {COUGH -HOW MUCH?}.
>
> We had another builder round to quote, who hasn't yet got back to us
> with a quote but he also passed the details onto a mate (checked with
> us) who came round to see us.
> This mate is not VAT registered.
>
> Now the difference in a price, if you assume 50% labour and 50%
> materials, should be about 10% of the total between non-VAT registered
> and VAT registered.
> This can be the difference between just affordable and not affordable.

VAT is chargeable on materials & labour, not just materials.

It is an utterly despicable tax IMO.

>
> So is there a level of job which fits neatly with a non-VAT regitered
> builder, such that it gives a decent return but doesn't take them over
> the limit for VAT registration, and does the building community tend to
> steer the smaller non-VAT registered builders towards these jobs and
> keep the bigger jobs for the VAT registered crowd?
>
> It does seem to make sense, and our non-VAT builder did tell us that has
> turned down at least one job because it would take him over the VAT
> threshold.

So would I.

>
> If this idea is valid (and it does seem to make some sense) then how
> does the small builder avoid VAT registration?

> As I see it there are a few main ways.
> (1) Take a large proportion of small jobs which keep you busy but don't
> break the budget.

That's how my business works. "Turnover is vanity, profit is sanity".

If I can make a good margin on something - like decking - I will buy the
materials & mark them up. If I can't - say fence panels - I get the
customer to buy them if possible.

If I hit the VAT threshold I would either have to charge 20% more - and
become uncompetitive - or take 20% less & not earn what I want to.

> (2) Take larger jobs but space them out so you only work say 6-9 months
> of the year.
> (3) Take larger jobs but do them 'slow and steady' at a lower hourly
> rate for labour to keep occupied all year and keep a steady income
> without the temptation to spend the spare cash. This especially if you
> really enjoy the job so wouldn't know what to do with 3 months a year off.
>
> I am ignoring any "do a few large jobs for the accountant/tax man and
> boost your take home with a steady stream of foreigners".

Heaven forbid.

>
> All in all, it seems there should be a 10% discount for using VAT
> unregistered builders.

They have higher overheads. They can't reclaim VAT on fuel, tools,
stationary & many other things.

> The only concern being if any decent builder will generate enough annual
> turnover to have to register for VAT.

Current threshold is £73K year, just over £6K a month.

--
Dave - The Medway Handyman www.medwayhandyman.co.uk

[ARWadsworth]

The Medway Handyman wrote:
> On 20/02/2012 11:13, David WE Roberts wrote:
> > We are currently getting quotes from builders to do the major work
>

> Current threshold is £73K year, just over £6K a month.

Is dennis not our resident VAT expert?

--
Adam

[Owain]

On Feb 20, 5:43 pm, "David WE Roberts" wrote:
> *(8) Completely demolish the house  & build a new one.

> So far the neighbours in the other semi seeem to be O.K. with our plans.
> However I think that may be a step too far.

Provided you leave the party wall in place ...

However the planners might not be agreeable to a semi- turning into a
lop-sided semi with your side bigger than the other half.

Owain

[Roger Mills]

On 20/02/2012 18:12, The Medway Handyman wrote:

>
> VAT is chargeable on materials & labour, not just materials.
>

We know that! The point is that you'll have to pay VAT on the materials
even if using a non-VAT registered tradesman - because he'll have to pay
it and can't reclaim it. So you only save on the labour if he isn't
registered for VAT.
--
Cheers,
Roger
____________
Please reply to Newsgroup. Whilst email address is valid, it is seldom
checked.

[David WE Roberts]

"Roger Mills" <watt....@gmail.com> wrote in message
news:9qfjr3...@mid.individual.net...

> On 20/02/2012 18:12, The Medway Handyman wrote:
>
>>
>> VAT is chargeable on materials & labour, not just materials.
>>
>
> We know that! The point is that you'll have to pay VAT on the materials
> even if using a non-VAT registered tradesman - because he'll have to pay
> it and can't reclaim it. So you only save on the labour if he isn't
> registered for VAT.

Yes, that was the implied calculation.
20% VAT on everything
50% is materials so you have to pay VAT anyway.
50% is labour so you can avoid paying VAT if the supplier of labour is not
VAT registered.
So the saving is 50% of 20% - which is 10%.
So the easy rule of thumb is that an estimate for the same materials and
labour should be 10% cheaper if the supplier is not VAT registered.
Simples :-)

[A.Lee]

David WE Roberts <nos...@btinternet.com> wrote:

> Yes, that was the implied calculation.
> 20% VAT on everything
> 50% is materials so you have to pay VAT anyway.
> 50% is labour so you can avoid paying VAT if the supplier of labour is not
> VAT registered.
> So the saving is 50% of 20% - which is 10%.
> So the easy rule of thumb is that an estimate for the same materials and
> labour should be 10% cheaper if the supplier is not VAT registered.
> Simples :-)

However, if you take your 50/50 calculation, if the quotes are the same,
then the VAT registered builder will be on the same profit as an
unregistered one, as he claims back the VAT on money spent.

I dont think building the shell will be a 50/50 split though. It'll be
more like 30/70 materials/labour, as the expensive part of building is
the fitting out, rather than putting up the walls/floors/roofs.
--
To reply by e-mail, change the ' + ' to 'plus'.

[David WE Roberts]

"A.Lee" <alan@darkroom.+.com> wrote in message
news:1kfs4ul.1lmu0a11wwlnvnN%alan@darkroom.+.com...

> David WE Roberts <nos...@btinternet.com> wrote:
>
>> Yes, that was the implied calculation.
>> 20% VAT on everything
>> 50% is materials so you have to pay VAT anyway.
>> 50% is labour so you can avoid paying VAT if the supplier of labour is
>> not
>> VAT registered.
>> So the saving is 50% of 20% - which is 10%.
>> So the easy rule of thumb is that an estimate for the same materials and
>> labour should be 10% cheaper if the supplier is not VAT registered.
>> Simples :-)
>
> However, if you take your 50/50 calculation, if the quotes are the same,
> then the VAT registered builder will be on the same profit as an
> unregistered one, as he claims back the VAT on money spent.

I don't think so.
If the quotes are the same, then one builder will be collecting VAT on the
labour which will go straight through.
I will be paying 10% to the government and the builder will be acting as an
unpaid tax collector.
Which means that for the same gross bill the VAT regitered builder will be
keeping 10% less of the money.

> I dont think building the shell will be a 50/50 split though. It'll be
> more like 30/70 materials/labour, as the expensive part of building is
> the fitting out, rather than putting up the walls/floors/roofs.
> --
> To reply by e-mail, change the ' + ' to 'plus'.

[ARWadsworth]

Man at B&Q wrote:

Ouch

> (6) Get the client to pay cash-in-hand.
> (7) Lie to HMRC.

And all our NI contributions will pay for the heart attack treatment that
you have just caused our dennis to suffer.

--
Adam

[hugh]

In message <9qff24...@mid.individual.net>, David WE Roberts
<nos...@btinternet.com> writes

>*(8) Completely demolish the house & build a new one.
>*Obtain the paperwork to reclaim the VAT before you start. Can work
>*out a lot more sensible.
>
>So far the neighbours in the other semi seeem to be O.K. with our
>plans.
>However I think that may be a step too far.

You need planning permission to demolish a house.
--
hugh

[Clive George]

On 20/02/2012 20:05, A.Lee wrote:
> David WE Roberts<nos...@btinternet.com> wrote:
>
>> Yes, that was the implied calculation.
>> 20% VAT on everything
>> 50% is materials so you have to pay VAT anyway.
>> 50% is labour so you can avoid paying VAT if the supplier of labour is not
>> VAT registered.
>> So the saving is 50% of 20% - which is 10%.
>> So the easy rule of thumb is that an estimate for the same materials and
>> labour should be 10% cheaper if the supplier is not VAT registered.
>> Simples :-)
>
> However, if you take your 50/50 calculation, if the quotes are the same,
> then the VAT registered builder will be on the same profit as an
> unregistered one, as he claims back the VAT on money spent.

Don't think so.

1000 quid quote, 500 quid materials.

VAT builder pays 500 for materials to supplier and sends 100 to the
taxman (200 in less 100 out), leaving 400 quid for his labour/profit.

Non-VAT builder pays 500 for materials to supplier and sends 100 to the
taxman, leaving 500 for his labour/profit.

> I dont think building the shell will be a 50/50 split though. It'll be
> more like 30/70 materials/labour, as the expensive part of building is
> the fitting out, rather than putting up the walls/floors/roofs.

Seems likely.

[harry]

On Feb 20, 5:43 pm, "David WE Roberts" <nos...@btinternet.com> wrote:
> "harry" <haroldhr...@aol.com> wrote in message

Ah. Missed the semi-detached bit.

[David WE Roberts]

"A.Lee" <alan@darkroom.+.com> wrote in message
news:1kfs4ul.1lmu0a11wwlnvnN%alan@darkroom.+.com...

The key thing is profit for the builder :-)

Hmmm.....
VAT reg.
£500 materials + 20% VAT - £600
£500 labour and profit + 20% VAT - £600
Cost to punter - £1200.

Material cost £500 (VAT reclaimed)
Labour cost and profit £500 (VAT passed on)
Total gross revenue to builder £500

Non-VAT
£500 materials + 20% VAT - £600
£500 labour and profit - £500
Cost to punter - £1100.

Material cost £600 (VAT not reclaimed)
Labour cost and profit £500
Total gross revenue to builder £500

So the net return to the builder should be the same - you don't penalise the
builder directly for being VAT registered.
However you do penalise the customer for using a VAT registered builder.

If the VAT registered builder was to match the non-VAT registered builder he
would have to knock £100 of his (labour + profit + VAT) figure which means
he would have to reduce his labour costs and/or his profit.

It will be interesting to see what the split is between materials and
labour.
If it is 30/70 then the non-VAT quotes should be significantly cheaper.
The VAT registered builder also gets to claim back less VAT.

Material costs will be significant because they will include bi-fold doors,
a new boiler, and a complete flue for a wood burning stove, a veranda and a
fibreglass balcony with glass surround and stainless steel rails.

Cheers

Dave R

[Man at B&Q]

On Feb 20, 8:38 pm, "ARWadsworth" <adamwadswo...@blueyonder.co.uk>
wrote:

You maen it wasn't terminal?

MBQ

[David WE Roberts]

"A.Lee" <alan@darkroom.+.com> wrote in message
news:1kfs4ul.1lmu0a11wwlnvnN%alan@darkroom.+.com...

and one more thing.
First suggestions of time were 6-8 weeks (no mention of number of people)
and 12 weeks from 2 man outfit.
So let us guesstimate that the labour is about 24 man weeks
Which is 120 man days.
Let us assume a price of £200 per man day to cover labour.
That would give a rough labour cost of £24,000.
If this was 70% of the cost I would be over the moon :-)

[Man at B&Q]

On Feb 20, 11:57 pm, Clive George <cl...@xxxx-x.fsnet.co.uk> wrote:
> On 20/02/2012 20:05, A.Lee wrote:
>
> > David WE Roberts<nos...@btinternet.com>  wrote:
>
> >> Yes, that was the implied calculation.
> >> 20% VAT on everything
> >> 50% is materials so you have to pay VAT anyway.
> >> 50% is labour so you can avoid paying VAT if the supplier of labour is not
> >> VAT registered.
> >> So the saving is 50% of 20% - which is 10%.
> >> So the easy rule of thumb is that an estimate for the same materials and
> >> labour should be 10% cheaper if the supplier is not VAT registered.
> >> Simples :-)
>
> > However, if you take your 50/50 calculation, if the quotes are the same,
> > then the VAT registered builder will be on the same profit as an
> > unregistered one, as he claims back the VAT on money spent.
>
> Don't think so.
>
> 1000 quid quote, 500 quid materials.
>
> VAT builder pays 500 for materials to supplier and sends 100 to the
> taxman (200 in less 100 out), leaving 400 quid for his labour/profit.

You VAT calculation is incorrect.

VAT registered builder charges £1000 inc. VAT (£833 + 20%). Pays £500
inc. VAT and pays a further £83 VAT to HMRC. £1000 - £500 - £83 = £417

> Non-VAT builder pays 500 for materials to supplier and sends 100 to the
> taxman, leaving 500 for his labour/profit.

Pays £500 inc. VAT. £1000 - £500 = £500

MBQ

[Man at B&Q]

On Feb 20, 6:12 pm, The Medway Handyman <davidl...@blueyonder.co.uk>
wrote:

> If I hit the VAT threshold I would either have to charge 20% more - and
> become uncompetitive - or take 20% less & not earn what I want to.

You really do need an accountant.

MBQ

[Bill Wright]

The builder could be on a VAT scheme where he doesn't reclaim the tax on
his inputs, charges VAT at 20%, but pays it to HMRC at a lower rate.
Lots of small traders are on such a scheme.

Bill

[Bill Wright]

Ask about VAT schemes other than the basic one.

Bill

[Man at B&Q]

His calculation would still be wrong.

MBQ

[David WE Roberts]

** Top post warning **
I know I am arguing with myself and losing but after a long walk and much
chuntering I think I may have finally grasped it.
Comments in text.

"David WE Roberts" <nos...@btinternet.com> wrote in message
news:9qh513...@mid.individual.net...
<snip>

>
>
> The key thing is profit for the builder :-)
>
> Hmmm.....
> VAT reg.
> £500 materials + 20% VAT - £600
> £500 labour and profit + 20% VAT - £600
> Cost to punter - £1200.

Not quite.
£500 material + 20% VAT accrues a VAT credit of £100 to the builder owed by
HMRC.
£500 labour + 20% VAT accriues a VAT debt of £100 to the builder owed to
HMRC.
So the builder owes no VAT and accrues no VAT.
As long as the builder reflects this in the bill - i.e. £100 paid for VAT on
labour but this cancels out the £100 VAT paid on materials - then the real
costs for VAT registered and non-VAT registered are the same as A.Lee
pointed out.
Cost to punter should be £1100 because the VAT on the materials is
effectively not paid by the builder.

>
> Material cost £500 (VAT reclaimed)

* Labour cost and profit £500 (VAT collecteed)

> Total gross revenue to builder £500
>
> Non-VAT
> £500 materials + 20% VAT - £600
> £500 labour and profit - £500
> Cost to punter - £1100.
>
> Material cost £600 (VAT not reclaimed)
> Labour cost and profit £500
> Total gross revenue to builder £500
>
> So the net return to the builder should be the same - you don't penalise
> the builder directly for being VAT registered.

<snip>

> It will be interesting to see what the split is between materials and
> labour.
> If it is 30/70 then the non-VAT quotes should be significantly cheaper.
> The VAT registered builder also gets to claim back less VAT.
>
> Material costs will be significant because they will include bi-fold
> doors, a new boiler, and a complete flue for a wood burning stove, a
> veranda and a fibreglass balcony with glass surround and stainless steel
> rails.

So the way I think it works (before I change my mind again).
If the split is 50/50 labour and materials then it should be a level playing
field between VAT and non-VAT builders.
If the labour is more than the materials then the non-VAT builder should be
cheaper.
If materials are more than labour then the VAT registered builder should be
cheaper, but the saving varies with the amount of labour.

[ARWadsworth]

There was something one the radio the other day (I am guessing radio 2 on
Monday afternoon) with the big bald bloke that knocks around with with her
with the big tits and nice arse on some make over show/bad builders
programme (dunno what it is called. It's the one where she flashes her tits
to the manager of a local shop for free goods and the shop gets a free 10
second advertisement on the programme)

He claimed that if you pay a builder with cash you could have your collar
felt by the taxman. AFAIK cash is still a legal tender............

--
Adam

[hugh]

In message <ji0mn4$7mi$1...@dont-email.me>, ARWadsworth
<adamwa...@blueyonder.co.uk> writes

But aiding someone to avoid taxis not lawful. However the possibility of
it actually happening is fairly remote I would have thought.
--
hugh

[ARWadsworth]

Does that not depend on their destination:-)?


--
Adam

[dennis@home]

"hugh" <hugh@[127.0.0.1]> wrote in message
news:zARw8uAvi$QPF...@raefell.demon.co.uk...

> But aiding someone to avoid taxis not lawful. However the possibility of
> it actually happening is fairly remote I would have thought.

Which law do you break by putting someone on a bus to avoid a taxi?

Its perfectly legal to help someone avoid tax too.

[ARWadsworth]

And a steaming great twat like yourself would be delighted to grass on
someone doing a cash job.

--
Adam

[Dave Liquorice]

On Tue, 21 Feb 2012 20:37:03 -0000, dennis@home wrote:

>> But aiding someone to avoid taxis not lawful. However the
possibility
>> of it actually happening is fairly remote I would have thought.
>
> Which law do you break by putting someone on a bus to avoid a taxi?
>
> Its perfectly legal to help someone avoid tax too.

Avoid yes, evade no.

Anybody with half a brain cell does all they can to avoid tax. Take
up their full annual ISA allowance, plan how to disperse their estate
and/or use the IHT rules before they pop off, claim back what they
can, claim Child/Working tax credits etc.

If HMRC start investigating some body they may well have a look at
anybody associated with them. That could include the people paying
them, just to see if there has been some VAT as well as tax evasion
going on.

Fairly sure that if a company pays some one gross (as they are on
short term contract or self employed) and that some one doesn't cough
up the tax. HMRC will come after the company wanting the taxed owed
on those payments.

--
Cheers
Dave.

[hugh]

In message <4f44006b$0$14852$c3e8da3$de69...@news.astraweb.com>,
"dennis@home" <den...@killspam.kickass.net> writes

But not to evade tax.
--
hugh

[Robin]

> If HMRC start investigating some body they may well have a look at
> anybody associated with them. That could include the people paying
> them, just to see if there has been some VAT as well as tax evasion
> going on.

Despite Dave Hartnett's recent comments there is no crime in paying in
cash and there can be no comeback from HMRC on VAT if someone simply
pays a builder or other arm's length provider of goods or services in
cash. There is also so far as I can recall no risk of income tax or
corporation tax falling on the payer if the relationship is not one of
contractor/sub-contractor or employer/employee (leaving aside some
fairly obscure issues). There are of course information powers which
might be used in some cases to require the payer to disclose what
payments were made when and for what but that is only a reegulatory
burden. There are also money laundering regulations but those are
surely unlikely to apply.

> Fairly sure that if a company pays some one gross (as they are on
> short term contract or self employed) and that some one doesn't cough
> up the tax. HMRC will come after the company wanting the taxed owed
> on those payments.

Is it possible you are confusing the initial "IR35" proposals with the
scheme as finally (re)introduced? The initial proposals would have
required companies (and others) paying for services from "servcie
companies" to deduct tax in certain circumstances on much the same lines
as when paying an employee. But that scheme was squashed. The IR35
scheme which lives on (in infamy in the eyes of many of course) does not
require payers to deduct tax and HMRC cannot recover unpaid tax from the
payer - unless they were really paying an employee or agency worker.
--
Robin
reply to address is (meant to be) valid

[larkim]

On Feb 21, 9:30 pm, "Dave Liquorice"

Depends on whether the company is also owned by the employee.

Under PAYE, companies are prevented from paying gross to employees.
There is a grey area around what constitutes an employee (http://
www.hmrc.gov.uk/paye/employees/start-leave/new-employee.htm#2) but
that's the general principle.

Companies who do engage someone where the employee / self-employed
question might be in that grey area are well advised to explicitly
write to the person to explain what the company's view is so that the
company has at least a record of what they thought at the time. It
might offer no defence at all, but most HMRC inspectors will see where
the intent was correct, even if they disagree with the application of
the rules.

Matt

[nimbu...@yahoo.co.uk]

On Feb 21, 1:12 pm, "David WE Roberts" <nos...@btinternet.com> wrote:
> ** Top post warning **
> I know I am arguing with myself and losing but after a long walk and much
> chuntering I think I may have finally grasped it.
> Comments in text.
>

> "David WE Roberts" <nos...@btinternet.com> wrote in messagenews:9qh513...@mid.individual.net...

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No No No

The Materals will cost you exactly the same as they will carry VAT
which ulitmatly goes to HMRC one way or aniother
The Vat Registered builder will collect that VAT and pass it onto HMRC
in his return and the material cost will be passed onto the buiilders
merchant effectivly without VAT as he claims it back
The Non Vat builder simply effectivly pays the Merchant the materials
and VAT directly as he cannot claim it back
There is no difference to you which way you buy materials
You will pay the same either way
HMRC will get the same VAT either way


The Labour is 20% more if you use a VAT registered builder which he
passes to HMRC and you cannot claim back
The Non VAT reg builders does not charge VAT and HMRC get nothing

Therefore for non VAT reg clients a non reg Builder will always be
cheaper whatever the material labour split

HTH Phil