BlueFuzz

Hi. Thank you for the reply. We did suspect as much. Can I just ask two follow up questions: 1. Our builder has been claiming that he is buying his materials at 5% and that is why there is no rebate for him to claim and pass back to us. Our understanding now is that this isn't possible. Is there any mechanism by which he could obtain his materials by only paying 5% at point of purchase? 2. He has also mentioned several times that he is reluctant to claim VAT back from HMRC because 'they never pay it back'. However, as a VAT registered business he would surely be required to do this quarterly as a matter of standard accounting process, wouldn't he? Thanks again for your help!

Hi. We are renovating a cottage that we have proof has been unoccupied for over 2 years. Our builder was happy to take on the job and charge us the 5% rate, and indeed his invoices state 5% on labour and materials. However, we recently discovered that for one item the amount he invoiced us was the gross amount that item cost from the supplier at 20% VAT. In other words, he has divided that amount by 1.05 and stated that as the net cost on his invoice to us. We now suspect he has been doing this throughout the build in which case we are potentially missing out on tens of thousands of pounds. Is he doing anything illegal, and if not is there anything we can do to recover the money? As things stand we suspect he is the one benefiting from the 5% rate, not us!