Tradesmen should you be charging VAT?

Charging VATVAT: Is it the right thing to do?

Every tradesman should be charging VAT and although during our lifetimes we’ll always be complaining about taxes and the highVAT rates introduced of late, the number of complaints has increased from both sides, tradesman and customers alike.
Let’s face it, we’re charging that extra not to benefit us but rather the Government. Okay well
perhaps it does benefit us… Eventually. There are still many tradesman that aren’t charging VAT
and okay, this perhaps is going against the law what should you do as the customer?
Well it has been observed that traders or firms going by the way of the taxes have a neat business
process and also grow a good relationship with their customers in spite of the extra charges. How
is that? It is because of their clean sheet financial data at the end of the year. On the other hand,
some non-VAT charging tradesmen have got more customer base and are earning more and sailing
through the competitive business world. From the perspective of a tradesman, VAT keeps them
secure on the legal side and it also drives away some of their customers if not many.
The problem of VAT charging and VAT paying have to be observed from the point of view of the
customers. VAT first of all is decided according to the value of the product or service you are
purchasing, so it can be considered as a value measuring instrument for the consumers. This
releases your tension about the quality of the products. However, considering the negative points,
VAT raises the prices and the quantity of the goods or service purchased. But this should not make
you consider that VAT is a loss incurring subject.
Like every other tax, VAT is remitted to the government and is finally being utilised for public
service. Consumers should understand that it is just a form of sales tax that they were paying
daily. Thus, VAT is not any extra amount being charged from the consumers and it definitely
contributes to the well being of the nation and society.
One major question related to VAT is regarding the faults in the products purchased. In case of
faults in any goods or services, the amount of tax charged remains the same. This shows the dark aspects of the taxing system. Coming back to the traders, VAT should be charged on every sale
made with an invoice.
Now how many consumers do really want an invoice of purchase? Most of the consumers focus on
the amount of money being saved and the traders are always happy to see off a satisfied
customer. But is this a sustainable process? What of the future implications, no taxes, no growth,
no work from the part of government and constant complains from the public. So just consider the
impact of not paying VAT and there are so many other taxes that are being flunked. The solution is
being loyal towards the legal considerations and VAT can definitely be the first step.
Bottom line if your tradesman isn’t charging VAT, first question – is he doing it right?! Perhaps he
is but with a £65,000 turnover threshold the tradesman would be straining to do it right! What
about guarantees with cash work paid, you think you’re getting a great deal but most likely they
don’t pick up when there is a problem.
Good guys charge VAT and tidy up at the end of the job.

Download the free VAT GUIDE HERE

 

This is a guest post by Economic Plumbing

Martin Leyton

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About leyton

Own business helping the tradesmen and small businesses to grow their business

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