Reply To: Double Charging of VAT

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#56003
Spidersong
Member

In that case I’d be mentioning the above provision on value and consideration, along with section 2 of the Act which sets VAT at 20%, so if we assume my mythical £100 again you have a line item including VAT of £120, which gives value of £100, plus VAT of £20 and therefore condideration of £120 for that line. You then have a subtotal that adds £24 VAT giving a value of £120 and VAT of £24.

So for one thing the court could ask him to demonstrate that since he’s (according to the invoice) charged £44 of VAT (on a value of either £100 or £120 neither of which would produce £44 of VAT) that that’s been remitted to HMRC (it almost certainly is just the £24 that has) and point out the logical impossibility of the value of a single supply being both £100 and £120 at the same time. As this isn’t Schroedingers VAT it can only be one or the other.

So to put it another way. S19 (2) says the consideration (price paid) of a supply of goods or services is equal to the value of the supply plus VAT. So a VAT inclusive price is therefore consideration for the supply. So whatever way you slice it he’s put two different values and two different considerations on the same invoice for the same goods, which is impossible.

Also the most basic point of VAT law is under S4 of the VAT Act – VAT can only be charged on a supply of goods or services made in the course of business – VAT itself is not a supply of goods or services so you cannot charge VAT on VAT. He has not made a supply of “VAT” to you on which he can charge VAT, which is essentially what S19 points out be separating the consideration for a supply into both value and VAT.

Good luck with your case.