On 06/10/2020 16:02, tim... wrote:


"John Rumm" wrote in message
o.uk...
On 04/10/2020 15:01, tim... wrote:


"Andrew" wrote in message
...
On 02/10/2020 21:24, John Rumm wrote:
On 02/10/2020 19:38, GB wrote:
On 02/10/2020 19:23, Chris B wrote:
I have just received an estimate from a tradesman (based on
photographs to save him the time of a visit) which includes £199
Plus VAT for listed parts.


The very same parts are available from suppliers listed on amazon
(not amazon itself) for £96.98 Including VAT and delivery.


I know that part of the tradesman's profit comes from the Sale of
parts but I always thought that they bought parts from suppliers
at trade prices and then billed for them at retail prices.

Is a markup on parts of well over 100% typical in the building
industry or is this a simple indication that he doesn't want the
job?


So far I only have one estimate, as I don't like wasting 3
peoples time for jobs of less than half a day, when only one is
going to get the job.

I am wondering if its worth getting any more or is this typical.



As a professional, I charged for my time. If I bought in services
for clients, I passed them on at cost.

Which if you literally do that (i.e. sell at your buy price), means
you lose money on every part sold - since procurement takes your
time, and bites into your cash flow, warranty replacements then
just increase that loss.

However, I got a quote from a gas fitter recently who charged a
fairly high rate for his time AND wanted to sell me a lot of parts
with a 100% mark-up. This made his hourly rate of charge really high!

100% might be taking the pee, although it depends on the market and
the product.



100% is pretty well par for the course in the garage trade. My
ex-MOT-tester neighbour still does it for all the private work
he still does. And he charges VAT on the bull**** 'retail' price
and then pockets the extra 20% on the markup.

However perverse it sounds, charging VAT on top of a vat-able price
for products bought retail is the correct thing to do

If he is VAT registered, then yes he must charge VAT on sales, but at
the same time will reclaim VAT on purchases.

only if the item is a disbursement

I think its the other way around. For general goods sold on, you reclaim
and charge VAT in the normal way. These are not disbursements.

A disbursement is when goods pass from supplier direct to customer, but
you make payment on their behalf. You are simply acting as an agent for
the customer and never "own" the goods at any point. This allows you to
not have to account for VAT on them (both reclaimed and charged).

There are only really two cases where its worth using a disbursement:
One is where the original supplied item was zero rated, and you are VAT
registered but the customer is not. Hence you would otherwise have to
add VAT that the customer can't reclaim. The other (probably more
useful) one is for non VAT registered businesses that are attempting to
stay under the mandatory VAT registration threshold, since disbursements
are not counted towards turnover. So matey can buy materials for a job
and in effect just act as an agent for the customer (not worth doing
IMHO since its going to cost you time and liquidity to do, and if the
materials are defective the hassle is still likely to land at your feet
regardless!)

if it isn't, then VAT should be charged on top of the VAT-added price

No see above.

I think what you are thinking about is a "VAT recharge" - this is where
you buy something that is notionally an expense that you expect the
customer to pay, but you actually take ownership of or use it yourself.
When making recharges, you have to charge VAT on them regardless of
whether it was zero rated or not when you paid for it. A classic example
might be postage. Its zero rated, so you can't claim VAT back, but if
you invoice the customer for the postage, then you must charge VAT. Same
might apply to some travelling expenses.

To be fair, this item should be a disbursement and if the supplier
treated it otherwise then that is a mistake

Its not the task of a supplier to judge if something is a disbursement.

In any case it seems that the scenario was that a non VAT registered
trader was adding VAT.Â* so that is just plain fraudulent and not an
accounting blip

Indeed.


--
Cheers,

John.

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