Viewing 40 posts - 1 through 40 (of 68 total)
  • VAT argument with shop, am I wrong?
  • I’ve been out today and bought a new motorbike helmet, and at the same time bought an intercom kit for it. The shop pushed for me to have them fit the kit for gratis so I let them.

    Now, helmets are zero rated for VAT and looking at the HMRC site, so are accessories attached at point of sale.

    The shop didn’t make any deductions for this and I think they’ve diddled me out of the VAT reclaim, they claim the price is the price. I’m pretty sure they push to fit the kits so they can pocket the VAT as most punters aren’t aware of VAT rules.

    Am I wrong? should I be marching back down there and asking for the refund??

    revs1972
    Member

    What does your receipt show. Does it show the VAT element to the price ?
    Have they charged VAT on the accessories or the helmet as well

    bri-72
    Member

    Deductions for what? If a helmets zero rated the price is the price, which will reflect the vat position.

    I think they’ve got the invoice wrong as they’ve shown 20% VAT on the intercom, obvs the helmet price is already NETT of VAT. rrp of intercom is £260 inc VAT, I think they should have charged £216.67 as it was supplied with the zero rated helmet.

    Mister P
    Member

    Deductions for what?

    The intercom kit price would include VAT if bought separately. If the OP is correct then the price should be reduced because the VAT would be removed, hence a deduction.

    dhrider
    Member

    Have you spoke to the shop?

    Why did you pay if you weren’t happy?

    Yes I’ve spoken to the shop, they’re arguing that the price is no different either way, which I disagree with.

    I paid because I didn’t think about it until I got home, but looking into it I think at best they’re uneducated about VAT, at worst operating a shady practice of keeping the VAT element for themselves as a bonus.

    Premier Icon peekay
    Subscriber

    Maybe they didn’t charge VAT on the intercom unit, but charged £43.33 (including VAT) for fitting of the intercom to the helmet.

    Maybe that’s how they want to argue it, but they’d be on shaky ground I reckon.

    taxi25
    Member

    Maybe their just unaware of the VAT rules on this, and were just trying to provide a good service by fitting it for you ? But I agree it does smell more than a bit fishy.

    Edukator
    Member

    Just ring the VAT fraud hotline and ask them what to do 0800 788887.

    I’m not going that far, as no fraud has been committed because they have actually invoiced me incorrectly, so not gained from it in my case.

    Edukator
    Member

    The VAT man doesn’t care who’s beed defrauded, there’s still fraud. The invoice has VAT that shouldn’t be there if I’ve understood correctly: fraud. I bet if you phone the shop and tell them you’ll be ringing the number I’ve given they’ll pretty much beg you to go back in for a VAT refund and exchange of invoices.

    revs1972
    Member

    Technically they havent as they are just collecting the VAT for the gov.
    Thats if they pay it. The fact they pushed for them to fit it ,could possibly mean they plan to not pay the VAT element to the gov and would therefore be committing fraud.
    Would only get picked up on a VAT inspection, and then they could just say they made a mistake and pay the VAT when challenged

    So let’s get this right, you were buying the helmet and intercom anyway, they had to talk you into fitting it so rather than walking out the shop with the helmet and seperate intercom at price plus VAT you walked out with the helmet and intercom fitted at price plus VAT. So you paid the price you would have anyway and got the intercom fitted for you.

    And now you feel hard done by?

    What’s the phrase again, no good deed goes unpunished?

    Premier Icon thisisnotaspoon
    Subscriber

    Sounds way more likely that they dont know, or dont think its to be interpreted in that way. The person at the till is probably a minimum wage saturday kid, not a VAT expert.

    Out of interest, Would you get 20% off a gopro if you stuck a mount to the new helmet?

    I think you’re most likely right, but there are probably a lot of shops who don’t know that.

    There was a bit of a discussion on a different forum whether an aftermarket intercom was classed as an integral part of the helmet, or whether the rules only covered OE fit. Maybe the shop does know, but errs on the side of caution and collects the VAT and pays the VAT on the intercom so the only person benefitting is HMRC, not the shop (and obviously not you).

    As for the argument itself, yes you are correct.

    3.3 Zero-rated accessories

    If you fit accessories such as visors, ear protectors or communication systems as an integral part of a qualifying helmet, you can zero rate the supply of the complete helmet. But accessories supplied on their own are standard-rated.

    https://www.gov.uk/guidance/protective-equipment-and-vat-notice-70123

    TINAS – probably not. I wouldn’t class a go pro as an integral helmet accessory unless the helmet had some sort of specific mounting for it. But I’m not a tax accountant.

    4.5 Zero-rated accessories

    If you fit accessories such as visors or ear protectors as an integral part of a qualifying helmet, you can zero rate the supply of the complete helmet. But accessories supplied on their own are standard-rated.

    Come to think of it they could be interpreting it the same way if the helmet has another matching OEM kit.

    Premier Icon scotroutes
    Subscriber

    So let’s get this right, you were buying the helmet and intercom anyway, they had to talk you into fitting it so rather than walking out the shop with the helmet and seperate intercom at price plus VAT you walked out with the helmet and intercom fitted at price plus VAT. So you paid the price you would have anyway and got the intercom fitted for you.

    And now you feel hard done by?

    What’s the phrase again, no good deed goes unpunished?

    Sometimes you despair, eh?

    Premier Icon endoverend
    Subscriber

    shops normally sell products that would fall into a range of VAT categories, different food categories etc…on their back-office system they should normally easily see the components of the RRP: purchase price, markup, VAT etc.  The VAT rate will depend on what category it’s been entered into the till system in and rigidly applied at point of sale. I bet what’s happened here is that the intercom is listed under electronics on their system…whether it should qualify as an accessory or not I have no idea, but that may not be so straightforward…. I doubt they have done anything intentionally.

    I’d imagine there are very good reasons for not being able to alter VAT coding at the point of sale.

    fooman
    Member

    Technically it might get past Inland Revenue but you’d be best getting it agreed before purchase, not retrospectively. You’re basically asking the shop to do a shedload extra paperwork to save you a few quid, especially if refunding vat on vatable items in very specific circumstances is not set up in their accounting system. If the Inland Revenue audit and disagree they’d also be liable for the vat even if they refunded you. So all round a PITA for the shop.

    So let’s get this right, you were buying the helmet and intercom anyway, they had to talk you into fitting it so rather than walking out the shop with the helmet and seperate intercom at price plus VAT you walked out with the helmet and intercom fitted at price plus VAT. So you paid the price you would have anyway and got the intercom fitted for you.

    And now you feel hard done by?

    What’s the phrase again, no good deed goes unpunished?

    Yes, to be honest. Fitting it is less than a five minute job, I’ve done loads myself. If the VAT rules state that the accessory should be VAT free and it’s not, wouldn’t it irk you?

    The VAT man doesn’t care who’s beed defrauded, there’s still fraud. The invoice has VAT that shouldn’t be there if I’ve understood correctly: fraud. I bet if you phone the shop and tell them you’ll be ringing the number I’ve given they’ll pretty much beg you to go back in for a VAT refund and exchange of invoices.

    As the invoice I have is showing the VAT element on the intercom then they’ll have to pay it to HMRC anyway, unless they doctor the invoice at a later date, so technically all they’re doing is paying HMRC the VAT I have given them (incorrectly). If they’d collected it and weren’t forwarding it then that would be fraud.

    Edukator
    Member

    I think you’re most likely right, but there are probably a lot of shops who don’t know that.

    I’d venture none. That doesn’t stop some going bankrupt each year when the VAT man visits and they have to pay all the VAT they’ve billed but not paid to the revenue. People in business are really clued up on VAT, I was, and some think they can play with the VAT rates to rip off either customer or the VAT man (usually both) – till someone like Blazing saddles phones the hotline and gives them an invoice number.

    Edit: business is so cut throat that denouncing competitors is a way of reducing unfair competition. In the field I worked in business onwers used private detectives to act as customers to get their hands on exactly the kind of fraudulent invoice the OP has in his hands and then make a complaint. I got investigated but as I’d never ripped off either a customer or the VAT people I came out smelling of roses. The problem is rife all over Europe.

    till someone like Blazing saddles phones the hotline and gives them an invoice number.

    There are a lot of accusations and/or assumptions on this thread, really. We don’t know, for certain, if an aftermarket intercom fitted at the point of purchase should be sold without VAT.

    Before shooting from the hip and going straight to HMRC, maybe ask to speak to the owner of the shop. They might know the rule and have an internal training or system need to address. They may not know and need to check with their accountants and then come back to you.

    Of course you could just go straight to HMRC. It’s not exactly a friendly approach to sorting it out though, and not every shop is owned by the bogey man or shyster.

    …unless they’re charging you 20% “VAT” but accounting for it as a fitting charge which you thought you were getting free. Maybe that’s why they insist on doing the fitting.

    Edukator
    Member

    Before shooting from the hip and going straight to HMRC, maybe ask to speak to the owner of the shop

    That’s what I suggested.

    sharkbait
    Member

    Interesting.
    The shop would have paid VAT on the BT sets when it bought them.
    So there must be a way to claim that back from C&E, but of course they could say that they fitted all of the BT sets they sold and then claim all the VAT back.
    Are we sure this is not for OEM kit?
    Seems amazingly open to abuse, which is very unlike customs and excise.

    Edukator

    Member
    Before shooting from the hip and going straight to HMRC, maybe ask to speak to the owner of the shop

    That’s what I suggested

    It’s not the tone of what I’m saying at all. You said call them and threaten them that you’re calling HMRC and they’ll beg to offer a refund. I’m saying call them and offer them the chance to understand the rules and get back to you.

    You’ve used the word fraud a lot. I think that’s a pretty harsh accusation – it might just be a knowledge gap.

    Yes, to be honest. Fitting it is less than a five minute job, I’ve done loads myself. If the VAT rules state that the accessory should be VAT free and it’s not, wouldn’t it irk you?

    No, because as you would have paid the same to do it yourself and had to be talked into it anyway I wouldn’t go biting the hand that feeds.

    In the field I worked in business onwers used private detectives to act as customers to get their hands on exactly the kind of fraudulent invoice the OP has in his hands

    And what field was that? When did you become a UK VAT expert Walt? You were a teacher before and after you emigrated, you know as much as anyone else at this stage.

    OP’s question about being diddled out of a bit of VAT heads towards the inevitable penis-clash. 😂

    Premier Icon Drac
    Subscriber

    Well it was a question about helmets. Now we’re seeing who is the biggest helmet.

    Premier Icon Matt24k
    Subscriber

    I think that you will find that the Helmet and fitted Intercom would have to be supplied to the bike shop as a boxed unit by the whoever invoices them in the UK.
    I know for a fact that when a retailer buys a helmet it is invoiced by the supplier at 0% but any visor ordered in addition to the one fitted is 20%. If the helmet comes from the manufacturer with an alternative visor in the box the whole package is 0%.
    The bike shop will have a suppliers invoice with 0% VAT on the helmet and 20% on the intercom as I imagine they would be sold as separate items. I think the VAT rules that you are looking at are for suppliers of complete systems rather that things that are added together at point of sale.
    For example you could by a helmet and several visors along with an intercom system and pay no VAT if your interpretation is correct.
    I would love to be wrong as I will be flogging helmets at the Excel Show next month and could help my customers save some money on spare visors.

    Oof. I can’t believe I missed out the helmet reference. 😂

    Premier Icon hamishthecat
    Subscriber

    OP’s question about being diddled out of a bit of VAT heads towards the inevitable penis-clash. 😂

    Indeed, the OP has never once suggested he’s going to call the VAT fraud line.

    Edukator
    Member

    Walt, who’s Walt, Squirrelking? I suppose that’s a cheap shot from a cheap adversary. Ran a profitable business or two for ten years, Squirrelking. Haven’t worked for years. Still have non-paid responsibilities that require VAT accounting knowledge, I “raised” the VAT rate being applied by a supplier as recently as last November.

    Note I say “raised”. The first step is raise the issue (the OP has doen that and been fobbed off), the next step is challenge (phone the shop), if the phone call doesn’t go well phone the hotline.

    Sensible, progressive, determined. Nowt wrong with that approach.

    Premier Icon kilo
    Subscriber

    May depend on nature of intercom, fitting and if it is integral

    An incidental element is also regarded as an integral part of the overall single supply in that it is required to fulfil the end supply. The definition of an integral element is that it includes anything which is essential, necessary or incidental, but goes further to incorporate non-essential elements which are nevertheless integral to the nature and economic reality of the supply.

    Premier Icon supercarp
    Subscriber

    I am totally confused. If they had not fitted the item would you have had to pay the VAT? By fitting it they saved you the time/hassle and now you should be owed a VAT refund?

    Looking at the guidance it states fitting items as an integral part but accessories supplied you pay VAT.

    To me that reads as the intercom you bought is actually an accessory not an integral part so you should have paid VAT regardless of whether you are he shop fitted it for you.

    What I think it means is if a manufacturer fits the intercom, visor etc. as part of the helmet at you wouldn’t pay the VAT on those additional items.

    In your situation this wasn’t the case it was as an a supplied item

    Probably got it wrong but that is my interpretation.

    revs1972
    Member

    I am a business owner, so I do know ALL about the VAT related to MY business. (Construction not retail).

    If I did own a shop that sold Motorcycle helmets and accessories, then, when blazing saddles placed the items on the counter, I would have said to him “ if we fit the intercom to the helmet before you buy it, then you can make a saving as you won’t have to pay the VAT on it”.
    If it was a five minute job, then I would say no problems there is no charge to fit.
    It’s called customer relations , you build up a trust with someone , and they come back when they buy something else. It’s no skin off your nose , and doesn’t cost you anything. They pushed him for them to fit it, so would suggest they know the score.

    revs1972
    Member

    3.3 Zero-rated accessories
    If you fit accessories such as visors, ear protectors or communication systems as an integral part of a qualifying helmet, you can zero rate the supply of the complete helmet. But accessories supplied on their own are standard-rated.

    That’s from HMRC, as usual you can interpret it as you see fit 😂😂

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