STAG BUILDERS OF HERTFORDSHIRE LIMITED
If i pay in cash can i avoid paying the VAT?
Definitely not... Let’s face it, no one likes paying taxes. We begrudgingly accept it as a necessary evil. Because of this, over the years there has been a stereotype that builders prefer payment in cash, and that paying a builder in cash means they don’t have to pay the tax. While there may be a grain of truth in it, many places are becoming cashless, and most builders these days are not intrested in cash payments because they prefer bank transfers to keep a record of accounts and payments going in and out. They can also reclaim back their outgoing VAT and their expenses at end of year corperation TAX.
The basic rule about paying VAT for a company is based on their turnover, so if a business turnover is in excess of £85,000 per annum they need to be registered for VAT, and will charge it on their goods and services.
A building company that is VAT registered, is a good indicator to the size of the company you are dealing with, and if you are getting them to quote for a large extension that is in the tens of thousands but they are not VAT registered then perhaps you should ask why, as they are either flying under the HMRC radar or perhaps have never undertaken such a large project before, both could be potential red flags.
However you clear your bill, It’s always a good practice to request a receipt for any and all services received, and the amount paid, to ensure that a clear paper trail is available, VAT or not. This can help protect you should there be any issues down the line. At the very least this will evidence a transaction has taken place and will prevent any argument that money was not received.