Vat registered offering cash price

[DIYM]

Looking at getting some building work done - sunroom conversion.

Builder is VAT registered but he has offered to do it for cash. Has also asked for deposit in cash up front.

Is this a red flag? I know the reasons why he might want cash and if he provides receipts for cash payments is that sufficient protection for me?

 

[HERTS P&D]

No, offer to pay the VAT.

Andy

 

[DIYM]

The quote is on document with the VAT reg details of the company etc. It just had 0 for the VAT part of receipt and a note to say cash payment. He has said this is to keep cost down for quote - which I understand. Does that make it legit?

I can offer to pay the VAT - does that give me added protection? I’ll get a invoice in either case

 

[KenGMac]

In this case pay by either credit card or bank card.

Why?

Check out section 75 in banking terms ??

 

[^woody^]

The tax arrangements of a builder is nothing to do with the quality of the work, and offers no protection at all in terms of guarantees.

 

[DIYM]

I meant protection in terms of paper trail and proof of payment.

He wants cash - not card.

 

[^woody^]

I meant protection in terms of paper trail and proof of payment.

He wants cash - not card.

Paper trail?

He does the job, you pay him, that's that.

 

[DIYM]

And if there’s an issue later surely it’s easier to prove said builder did the work by showing receipts, contracts, invoices - paper trail?

Or if I pay a deposit as requested surely it’s easier to prove with a receipt for the deposit?

I’m trying to figure out why paying cash is a bad option - if it actually is.

 

[oldbutnotdead]

Have you done any due diligencey on this builder- ie checked companies house (assuming its a registered company), checked for ccjs and previous companies (looking for phoenix type patterns).
Nowt wrong with cash but an invoice from a VAT registered company for VATable services with a zero in the VAT line won't be very useful in the future (for example if you wanted to use it to reduce your CG liability).
Other problem with cash is if you pay a deposit or stage payment or whatever the builder (and company) vanish you have to chase them for the cash. See above...

 

[^woody^]

And if there’s an issue later surely it’s easier to prove said builder did the work by showing receipts, contracts, invoices - paper trail?

Or if I pay a deposit as requested surely it’s easier to prove with a receipt for the deposit?

I’m trying to figure out why paying cash is a bad option - if it actually is.

Non of that is ever an issue in real life.
No builder ever pretends that he didn't do a job, and was not paid.

If you're worried, just take a photo of him working or his van parked outside.

Whether a builder charges VAT or not is absolutely nothing to do with a domestic customer.

 

[EddieM]

If the builder is providing services through his building company and is registered for VAT he is duty bound to charge, account for and collect said VAT.

I'm afraid the only conclusion you can come to in this situation is he's trying to avoid VAT for some, almost certainly nefarious reason.

 

[^woody^]

Perhaps he just wants the work and wants to be 20% cheaper to compete with all the others?

He may just put it through as disabled work.

 

[teaboyjim]

Also the builder might have a complex structure where some jobs which are separate and distinct might have a Ltd company which isn't VAT registered whereas he himself as a sole trader is VAT registered.