Would you use someone not VAT registered?

[notalterna]

Does it matter if they are VAT registered or not?

Had a few quotes and all of them included VAT bar one who said he wasn't. He was cheapest (due to not charging VAT).

Any advice?

 

[Estrella]

I wasn't VAT registered and I did a lot of work for businesses and domestic clients. About a 40/60 split. I was a sole trader and wasn't buying / selling large value items. The bulk of my invoices were labour, so I didnt quite reach the VAT threshold. But then again 80% of my work came from referrals, so this issue of VAT , what van I drove, how I dressed were never an issue to me.
Does the non vat guy have any references ? Previous work undertaken etc ?

 

[noseall]

why be a vat collector?

pointless unless you deal within the vat carousel.

 

[Paul Barker]

I was forced into it by turnover but wouldn't have volunteered, and would deregister in future if i was doing private work.

However it isn't all doom and gloom, you aren't 15% more expensive because you get your vat back on your inputs and your fixed costs and overheads, so the true extra cost of you compared to non registered to the customer isn't that great. It is more a psychological problem. Conversely some may see the vat registered business a little less flighty, whether rightly or wrongly.

As I sub contract I benefit from vat registration by recovering the vat on van and other capital items and fixed costs.

 

[notalterna]

Never had to deal with all this before so even tradesmen being vat registered or not is a new thing

I didn't even realise there was a threshold until I started looking it up.

Thanks for all the help, we await references from the non-vat man.

 

[JohnD]

He was cheapest (due to not charging VAT).

He will still have to pay VAT on all the materials he buys

You will only save being charged VAT on his labour.

Not much of a saving.

Of course, people who don't pay income tax and NI, scrounge benefits, use stolen materials, have no insurance, are untrained, run off with your money without finishing the job, can offer much cheaper prices.

Did he meet your quality and confidence criteria?

 

[WoodYouLike]

As long as you get all quotes in writing it doesn't matter if someone is VAT registered or not.
As soon as their business reach the VAT threshold of turnover they have to register, has nothing to do with being cheap or 'cowboys'.

 

[JohnD]

but it is a bad sign if someone says "I can do it cheapo if you pay me in cash and we avoid the tax, wink, wink"

 

[notalterna]

quotes all in writing. this isn't a mate of a mate looking for some pocket money.

Just a bit confused as everyone else had +VAT on quotation except his.

 

[^woody^]

but it is a bad sign if someone says "I can do it cheapo if you pay me in cash and we avoid the tax, wink, wink"

That is what the government want us all to think and was (maybe still is) a key part of their failed Quality Mark type schemes.

The quality of a job has absolutely no relation to whether someone is VAT registered or not, or whether they are paid in cash or not.

 

[cashjob]

All of my work is private, and approx 50 percent pay in cash (as my name suggests ). This means that VAT registration is not a problem for me.

 

[WoodYouLike]

Only when you turnover then reaches twice the thresholds you have to register after all - or not that busy (yet)?

 

[chappers]

I personally would be wondering how good or experienced a builder was, if he wasn't VAT registered.
Unless you are working on a labour only basis, then athere are probably only two reasons why a builder shouldn't be VAT registered and they are that the builder is in his first year of trading or he doesn't have any work. it only takes a couple of loft conversions or extensions to take you over the threshold.
obviously there are decent builders out there who work under the tax radar, but then thats up to you.

 

[^woody^]

Perhaps its not his main job, and he'll work for cash at the weekend.

Or building is his main job and he'll work for cash at the weekend

Or building for someone else is his main job and he'll work for himself for cash at the weekend

Or he gets his customers to buy all the materials and just works for labour to keep himself below the VAT level

Use other methods for choosing a 'good' builder, and not his VAT or tax status

 

[Thermo]

we did all we could to keep below the vat threshold when we started out. didnt last long, but it was a selling point with some customers. Just because he is not vat registered, as woody says dont worry. look for refences and check them out from all the guys that quoted.