Harringay, Haringey - So Good they Spelt it Twice!
Cash or invoice?
A local tradesperson recently did a job for me and quoted a price on the phone in advance. In the phone call, they asked if I’d be paying cash or wanted an invoice and I opted for the latter so as to have a record of the job. However, when the invoice turned up it had an extra 20% added to the quoted price; they’re not VAT-registered, and told me it’s because “an invoice incurs extra charges” when I asked why.
Now we all know how the cash economy works and I’m not trying to be holier-than-thou or moralise; but I’m fed up with the “if you pay me now I’ll send you an invoice” spiel (duh.... ) as there’s obviously no comeback if there’s a problem but no paper trail. In fact, this person’s work was OK and I might want to use them again, but I feel a bit ripped-off all the same. Has anyone else come across this and is it just a fact of life these days?
Replies to This Discussion
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Permalink Reply by John D on
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Many tradesmen and garages give a quotation ex VAT whether they take cash or not. I don't like it, because the final bill comes as a shock but they're not all tax dodgers.
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Permalink Reply by John McMullan on
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If they're not VAT registered then the 20% is to cover corporation tax.
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Permalink Reply by Don on
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No, I'm not claiming that this person is a tax-dodger; when I queried the total, they specifically said they're not VAT registered but that an invoice incurred extra costs. Perhaps John McM's comment answers the point, though corporation tax is 19% this tax year.
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Blatantly tax dodging. There's no way an invoice incurs 20% extra charges other than the money not being off the books and having to pay tax on it.
Personally I'd refuse to pay the extra 20% unless they can give a satisfactory explanation and I wouldn't be planning on using someone again who arbitrarily increased their prices like that.
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Well, I did also think of paying them the full amount in pennies and hand-delivering the cash, to make the point that they'd have to work for the extra £, but I'm not sure it's a practical proposition!
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I guess the issue is what happens if you don't pay it. They're not going to go down the legal route as I suspect they won't want to explain why doing work off the books is so much cheaper.
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Permalink Reply by Hugh on
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I would advise that resolution by agreement is a much better route than confrontation.
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Completely agree. Luckily we're talking £10s not £100s, and I'm all in favour of avoiding escalation or litigation.
Anyway, I've expressed my frustration and thanks for comments and advice; I'll know better in future. Besides, the trader in question might even keep an eye on this forum (that's a genuine ponder not a barbed comment, by the way - I've no idea at all if they're a member).
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It's pretty standard that most, but not all, tradesmen will do some work off the books. That means they don't pay income tax and will pass that on to the client. If you feel strongly that you don't want to support this practice any tradesman will be happy to invoice you for the full cost. Your builder should have been clearer when you told him you wanted an invoice, but he might have expected you to know how things work. Now you do.
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Yes, of course that's how it works, but this is really more about communication than anything (not morality). I was quoted £X as the price for the job and only asked if I wanted to pay cash or have an invoice; I agreed that price and then got an invoice for £X + 20%. It's the pitfall of agreeing things by phone, not in writing, and with a possible hidden implication in the conversation. Mind you, if anything, I might have expected a 20% discount from £X for cash!
Still, thanks all for the collective wisdom. Luckily the total's not vast and right now I've got bigger problems to bother about, so I learn from experience, as Hugh says.
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