VAT excluded from quote.

Gatecrasher

Gatecrasher

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My slate roof (in Joburg) needed repair, so we phoned several roofing companies and got four different quotes. The company we chose stipulated that we pay 50% upfront and 50% on completion, so we paid 50% of the quoted amount. On completion of the job, the contractor apologised by email that his admin staff had failed to add VAT to the quotation and then sent us a revised invoice, now inclusive of VAT.

If I look at the original quotation I can now see that it says excluding VAT (in small writing), we missed that completely, however all of the competing quotes had VAT included. The quote was for R25k so the VAT is not a trivial amount.

I feel inclined to only pay the balance of what was quoted. As I understand it, it is illegal to quote a price to an end user that excludes VAT unless the inclusive amount is also given. Is this right?

What would you do in my shoes?
 
afaik vat exclusive is only valid to other dealers aka wholesaler ->> dealer and the general public must be given the price with vat already included.

Gatecrasher said:
My slate roof (in Joburg) needed repair, so we phoned several roofing companies and got four different quotes. The company we chose stipulated that we pay 50% upfront and 50% on completion, so we paid 50% of the quoted amount. On completion of the job, the contractor apologised by email that his admin staff had failed to add VAT to the quotation and then sent us a revised invoice, now inclusive of VAT.

If I look at the original quotation I can now see that it says excluding VAT (in small writing), we missed that completely, however all of the competing quotes had VAT included. The quote was for R25k so the VAT is not a trivial amount.

I feel inclined to only pay the balance of what was quoted. As I understand it, it is illegal to quote a price to an end user that excludes VAT unless the inclusive amount is also given. Is this right?

What would you do in my shoes?
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Failure to include the wording "excludes VAT" would deem the quote to have included VAT. Unfortunately seeing they had included the wording I don't think you can fight them.

I'd suggest you discuss it with them rationale explain you had budgeted on the lower amount, and could you they meet you say half way on the difference. Being nice about it sometimes gets you further than going in with a whip immediately.
 
R25k seems a lot for that job. You running a 20 room hotel?
 
I recall there's all kind of stuff about the size of wording etc when it comes to including VAT & excluding VAT. Visit sars.gov.za & check the regulations if you want to pursue it.
 
Divestar said:
The builder will have to pay the full VAT amount anyway. You can try, but I doubt that he will give you discount on the VAT.
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Yea, but it's a very dodgy practice to begin with. You ask 5 quotes, and one is 10% cheaper so you take them....and after all is said and done they add VAT and they're suddenly 4% more expensive. It's not consumer friendly and a bad practice to do it to end consumers, there's no grey area, it's there to deceive and mislead if you quote to an individual without including vat.
 
This part rings alarm bells:
On completion of the job, the contractor apologised by email
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Seems like an awfully convenient way to win job tenders & suspicious timing too.

Also, the fact that it says ex VAT on the original invoice, strikes me as cold calculating. i.e. Trying to protect himself in case a client picks up on it. If it said nothing at all, then it would be a lot more plausible as an admin screwup & forgive it. Nobody accidentally writes Ex Vat on invoices.:rolleyes:

I certainly wouldn't pay without a serious face to face talk & a more solid explanation. If you really want to freak them out you could always drop a line like "I'll just phone SARS & see how this should be handled".:D
 
HavocXphere said:
This part rings alarm bells:

Seems like an awfully convenient way to win job tenders & suspicious timing too.

Also, the fact that it says ex VAT on the original invoice, strikes me as cold calculating. i.e. Trying to protect himself in case a client picks up on it. If it said nothing at all, then it would be a lot more plausible as an admin screwup & forgive it. Nobody accidentally writes Ex Vat on invoices.:rolleyes:

I certainly wouldn't pay without a serious face to face talk & a more solid explanation. If you really want to freak them out you could always drop a line like "I'll just phone SARS & see how this should be handled".:D
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try it.
 
If you chose the contractor on the basis of being the lowest quote and if the VAT puts you over the next lowest quote, offer to match that next lowest quote.

Otherwise you're looking at either small claims court (Although R25k may make that a non option) or possibly an ombudsman for arbitration. Legal fees will wipe out any benefit you get from fighting this through the courts.
 
Lounger said:
R25k seems a lot for that job. You running a 20 room hotel?
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Not quite, but including the cottage (also repaired) there are 10 bedrooms. So it is a big house. My work colleagues used to joke that I lived at the "Hyde Park Hotel".

One of the quotes was for R52k!
 
The guy should have said something when he noticed the deposit wasn't 50%.... I recon its deliberate.
 
If you don't come right, Name & Shame. Here, Hello Peter, SARS (It is illegal to quote Ex VAT.)

Small Claims Court limit is claim of R7000 I think.
 
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Icarium said:
If you chose the contractor on the basis of being the lowest quote and if the VAT puts you over the next lowest quote, offer to match that next lowest quote.

Otherwise you're looking at either small claims court (Although R25k may make that a non option) or possibly an ombudsman for arbitration. Legal fees will wipe out any benefit you get from fighting this through the courts.
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The disputed amount is the R3.5k VAT. So might still be okay for small claims.

However, just looking at the SARS VAT 404 Guide for vendors principle number 1, the very first item in the guide states:

All prices charged, advertised or quoted by a vendor must include VAT at the applicable rate. (Presently 14% for standard rated supplies).
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The contractor is clearly in breach of S.65 if the VAT act, and as such is liable for any damages you suffered as a result of his actions. Having said that, I doubt you'd be able to avoid paying all the VAT, but you shouldn't pay any more than the next cheapest quote. Also, if he's being an ass, report him to SARS, it won't get you your money back, but it'll make him suffer (without too much effort by you). I don't believe in this "turn the other cheek" bull****, revenge is sweet.

PS: Get rid of the slate roof; It will never stop leaking.
 
Drunkard #1 said:
The contractor is clearly in breach of S.65 if the VAT act, and as such is liable for any damages you suffered as a result of his actions. Having said that, I doubt you'd be able to avoid paying all the VAT, but you shouldn't pay any more than the next cheapest quote. Also, if he's being an ass, report him to SARS, it won't get you your money back, but it'll make him suffer (without too much effort by you). I don't believe in this "turn the other cheek" bull****, revenge is sweet.

PS: Get rid of the slate roof; It will never stop leaking.
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No firm wants a VAT audit. SARS invariably find something wrong.
 
Billy said:
If you don't come right, Name & Shame. Here, Hello Peter, SARS (It is illegal to quote Ex VAT.)

Small Claims Court limit is claim of R7000 I think.
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It is NOT illegal to quote ex-VAT. As long as you state on the quote that it is ex-VAT. The previous post that refers to the VAT act does not apply to quotations. It is the regulations for TAX invoices.
 
warwickw said:
I'd suggest you discuss it with them rationale explain you had budgeted on the lower amount, and could you they meet you say half way on the difference. Being nice about it sometimes gets you further than going in with a whip immediately.
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+1

Is there any warranty on their (the contractor) work ? Being aggro towards them might just burn bridges when you need a warranty honored.
 
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