Quoting without VAT?

Q

Quintrix

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My plumber verbally quoted R300/h + material to do a job but when the invoice arrived it was R300/h + material +(VAT on the total )

What do I owe the plumber?
Is qouting without VAT legal?
 
Quintrix said:
My plumber verbally quoted R300/h + material to do a job but when the invoice arrived it was R300/h + material +(VAT on the total )

What do I owe the plumber?
Is qouting without VAT legal?
Click to expand...
Yes it's legal if the service provider does not have to be registered for VAT. If he is he must charge VAT, if he isn't VAT registered he can charge VAT but that makes him liable for that VAT to SARS.
The mistake he made was to not tell you about the added VAT to the quote.
 
It is legal as Lager mentioned but he needs to be a vat vendor and display his VAT number on the invoice. if he is claiming back the vat. Also if he quotes excluding vat it does have to say on the invoice that it excludes VAT in the total.

We often quote without VAT on our quotations as most of our customers are laboratories or testing facilities that work with budgets. this way they can see exactly how much money the items are going to cost them from their budgets, without taking the VAT off. But we do stipulate quite clearly that it is VAT exclusive.
 
ISP cash cow said:
It is legal as Lager mentioned but he needs to be a vat vendor and display his VAT number on the invoice. if he is claiming back the vat. Also if he quotes excluding vat it does have to say on the invoice that it excludes VAT in the total.

We often quote without VAT on our quotations as most of our customers are laboratories or testing facilities that work with budgets. this way they can see exactly how much money the items are going to cost them from their budgets, without taking the VAT off. But we do stipulate quite clearly that it is VAT exclusive.
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:D
Cool nick btw
 
The invoice does include a VAT number -

I understand B2B but i would expect a quote to a member of the public to include VAT :(
 
Lager said:
Yes it's legal if the service provider does not have to be registered for VAT. If he is he must charge VAT, if he isn't VAT registered he can charge VAT but that makes him liable for that VAT to SARS.
The mistake he made was to not tell you about the added VAT to the quote.
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Not sure if I follow what you are stating above :confused:

The VAT Act states that the prices quoted or advertised by a vendor shall include VAT, unless clearly specified that the price excludes VAT. And they can’t make the VAT exclusive price bigger than the higher VAT inclusive price.

The act says: “Where the price inclusive of tax and the price excluding tax for a supply are advertised or quoted, both prices shall be advertised or quoted with equal prominence and impact.”

If no mention of VAT is made then the quoted price is deemed to include VAT at the applicable rate if the vendor is registered (or liable to be registered). If he is not registered / liable for registration he is not entitled to add VAT to his prices.

ISP cash cow said:
It is legal as Lager mentioned but he needs to be a vat vendor and display his VAT number on the invoice. if he is claiming back the vat. Also if he quotes excluding vat it does have to say on the invoice that it excludes VAT in the total.

We often quote without VAT on our quotations as most of our customers are laboratories or testing facilities that work with budgets. this way they can see exactly how much money the items are going to cost them from their budgets, without taking the VAT off. But we do stipulate quite clearly that it is VAT exclusive.
Click to expand...

Provision is made for trade prices to be quoted excluding VAT however this still needs to be clearly indicated on the quote / price list
 
VAT vendors must always quote or invoice in VAT, except when the service or product is VAT-exempt. Pricelists may be without VAT as with distributors, except when the VAT vendor advertise the pricelist to the public.
 
Quintrix said:
The invoice does include a VAT number -

I understand B2B but i would expect a quote to a member of the public to include VAT :(
Click to expand...

Yeah, that doesn't sound right at all. If it isn't against the CPA/VAT Act, it's certainly underhanded, because as you say, this isn't a business to business relationship (right?), it's a plumber providing a service to you and you're paying in your personal capacity, so you wouldn't be able to reclaim the VAT anyways. You'd expect any quote to include VAT.
 
Lager said:
Yes it's legal if the service provider does not have to be registered for VAT. If he is he must charge VAT, if he isn't VAT registered he can charge VAT but that makes him liable for that VAT to SARS.
The mistake he made was to not tell you about the added VAT to the quote.
Click to expand...

I hope that any further posts are not going to be a load of tripe like this one.

It is against the VAT act to quote without VAT.
 
Billy said:
I hope that any further posts are not going to be a load of tripe like this one.

It is against the VAT act to quote without VAT.
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Utter nonsense, it is against the law to output VAT when non-registered as a VAT vendor that is adding an additional 14% under the VAT guise. Quote me the VAT act in this regard.

http://www.saipa.co.za/expertquestion/239085/non-vat-vendors-raising-invoices-quotes-inclusive-vat

Category:
Tax

Question:
Hi,Can a supplier who is not registered for VAT nor in the process of VAT show a line item for VAT on their invoices or show their invoice price / quotes for goods as incl (i.e. including VAT)?

Answer:
It is given that the vendor has not processed a Vat application.

A non-vendor is not entitled to account for output vat on any supplies of goods or services which the non-vendor may make and therefore cannot charge vat.

If the recipient - a vendor - of the goods or services supplied by a non-vendor and the recipient conduct an `enterprise’ as defined in the Vat Act, then the vendor will not be able to claim an input tax deduction without being in possession of a valid tax invoice. The non-vendor would not be able to issue a valid tax invoice!

The recipient of the goods/services, in this situation, should not pay vat until it is in a possession of a valid tax invoice.

The supplier – a non-vendor - cannot issue invoices levying output vat!
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Lager is also wrong, you cannot charge VAT when non-registered as a VAT vendor, it is simple Fraud. The whole "VAT pending" on invoices is a myth to charge VAT.
 
Billy said:
I hope that any further posts are not going to be a load of tripe like this one.

It is against the VAT act to quote without VAT.
Click to expand...
If you're not a VAT vendor than you don't have to add VAT and your invoice states 'Invoice' on top, not 'VAT Invoice'
 
Fulcrum29 said:
Lager is also wrong, you cannot charge VAT when non-registered as a VAT vendor, it is simple Fraud. The whole "VAT pending" on invoices is a myth to charge VAT.
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Am I understanding this wrong?
From SARS;
15. Invoices issued by Unregistered Persons

Where a trader not registered for VAT issues an invoice showing an amount of VAT, that trader is liable for the VAT shown on the invoice. Such a person also leaves himself liable to penalties.
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My understanding here is that he is liable to pay that VAT over to SARS
 
So mr. Plumber MUST be a registered vendor to enable him to collect VAT.
It is however a discussion between Quintrix and the plumber to resolve the issue since he didn't mention the added VAT.
 
Lager said:
Mistake. Not SARS. Sorry about that.
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No problem, it is only that the VAT pending myth is a popular believe in SA. There are many start-up companies doing this, don’t know who their tax practitioners are since this is an alarm when submissions are done. SARS under ‘normal’ circumstances also only take action against these entities with penalties in this regard with paper trails, and in larger cases the penalties translates to fraud.'

Note: You can state "VAT Pending", but you still cannot output VAT in this regard.
 
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Fulcrum29 said:
No problem, it is only that the VAT pending myth is a popular believe in SA. There are many start-up companies doing this, don’t know who their tax practitioners are since this is an alarm when submissions are done. SARS under ‘normal’ circumstances also only take action against these entities with penalties in this regard with paper trails, and in larger cases the penalties translates to fraud.'

Note: You can state "VAT Pending", but you still cannot output VAT in this regard.
Click to expand...
I'm aware of this. A good friend of mine did this for quite some time before he got his VAT number
 
Fulcrum29 said:
VAT vendors must always quote or invoice in VAT, except when the service or product is VAT-exempt. Pricelists may be without VAT as with distributors, except when the VAT vendor advertise the pricelist to the public.
Click to expand...

So my understanding is correct - I do not owe VAT on the labour part of the qoute ??? ( the verbal agreement without ever mentioning that it does not include VAT)
 
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