VAT excluded from quote.

Divestar said:
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.
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Er, no.

Any price advertised or quoted by any vendor in respect of any taxable supply of goods or services shall include tax and the vendor shall in his advertisement or quotation' state that the price includes tax, unless the total amount of the tax chargeable under section 7(1)(a), the price excluding tax and the price inclusive of tax for the supply are advertised or quoted by the vendor: Provided that-

i) 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;

ii) price tickets on goods need not state that the prices include tax if this is stated by way of a notice prominently displayed at all entrances to the premises in which the enterprise is carried on and at all points in such premises where payments are effected;

iii) the Commissioner may in the case of any vendor or class of vendors approve any other method of displaying prices of goods or services by such vendor or class of vendors during a period approved by the Commissioner which commences before and ends after the commencement date or, where the rate of tax is increased or reduced, the date on which the increased or reduced rate of tax takes effect.

iv) a vendor may not state or imply that any form of trade, cash or any other form of discount or refund is in lieu of the tax chargeable in terms of section 7(1)(a).
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Divestar said:
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.
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I received a quotation ex vat. Then I received a tax invoice ex vat. I paid 50% as a deposit. They completed the work, and then sent a revised invoice that included VAT.
 
warwickw said:
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.
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Yes hehe, good plan.

But I always hope to see companies burn for not putting up vat inclusive prices.. hope he doesn't have to pay them
 
Some strange answers about small claims court etc. As I understand it, you haven't paid the balance, right? Then, there is no need for court action. You simply deduct that VAT and pay him the balance. Cruel? No, not at all...Because he didn't include the VAT in the legally required manner, you were mislead and you may have only chosen his quote because you improperly believed him to be the cheapest. *However* if he did a good job, *if* the price was still substantially lower even with the VAT included and *if* you believe on the evidence at hand that he made a genuine error based on ignorance or an error by his staff, then *if* he can provide you with a valid VAT number then I would be inclined to pay him the money including the VAT BUT only *if* all these conditions are true.
 
Milano said:
Some strange answers about small claims court etc. As I understand it, you haven't paid the balance, right? Then, there is no need for court action. You simply deduct that VAT and pay him the balance. Cruel? No, not at all...Because he didn't include the VAT in the legally required manner, you were mislead and you may have only chosen his quote because you improperly believed him to be the cheapest. *However* if he did a good job, *if* the price was still substantially lower even with the VAT included and *if* you believe on the evidence at hand that he made a genuine error based on ignorance or an error by his staff, then *if* he can provide you with a valid VAT number then I would be inclined to pay him the money including the VAT BUT only *if* all these conditions are true.
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It wasn't the lowest quote, it was the second highest.

I've paid the 50% balance as per the original invoice and written an email expressing my shock at receiving a revised tax invoice, a practice I consider to be both illegal and unprofessional. I also referred him to the relevant sections on the SARS website. I'll see what the comeback is.
 
Milano said:
So what did you conclude? Do you think he is a snake or a buffoon?
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I can't really say. There is nothing personal about this, and it might have been an oversight. I'm quite happy to pay what I was expecting to pay. I just don't feel comfortable about paying the VAT without a whimper, and potentially encouraging this type of practice.
 
Imminent said:
so that u can get even more taxed?
Pot>>>

It seems to me like a success story, congratulations Gatecrasher !!
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Haha true you'll pay even more tax. Tax free = P O T (planted organic tree) hehe :)
 
What happens if the contractor turned out to be ok with SARS etc but the OP still doesn't pay? Contractor take him to small claims court? Or "blacklist" him somewhere?
 
Well, I've had not a word of protest from the guy. So he is either putting it down to experience to retain a client or has referred me to his lawyers or knee-breakers.
 
we pay 50% upfront and 50% on completion, so we paid 50% of the quoted amount.
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i would use this in my defense if i were you. If you paid 50% on the ex vat price, they breached their own terms and conditions, by accepting your 50% as the upfron they agreed to the price they gave you
 
Two things:-

First is that his standard quotation template should include VAT - if he chose to give you a quote without VAT, then it most likely was a choice, and not an error.
Secondly, his profit is likely to be quite a bit more than 14%, so while he may not have made a lot on the job, he has not lost money if he doesn't get paid the VAT.

If he can't take the knock for R3500, then he'll not be in business long enough to honour any warranty in any case, but it's a big enough sum of money to teach him the lesson of checking his quotes twice before sending them out (assuming that it was an honest mistake).

In a nutshell, I'd not be inclined to pay the VAT, unless there was a compelling reason to.
 
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