Reimbursement with or without VAT

[vatquery]

Hi,

I purchased a new build property with a VAT registered company. I am not VAT registered or a company.

I have told them to reimburse me with the cost of the full kitchen. For arguments sake, 2,400 (incl VAT). The reimbursement is excl VAT 2,000. 

Is this correct? Should I be reimbursed incl or excl VAT? 

[vatquery]

I am getting my kitchen from a totally different company (separate from the new build trader). So they are reimbursing me the cost it would have been for the kitchen.

[Trevor S]

How much the builder pays you is not a VAT issue as such, it is a matter between you and them. If there is something contractually requiring them to meet your costs, then your costs are the £2,400.

But, if the builder had subcontracted the kitchen fitting to the company you have found before selling the house to you, they could have reclaimed the £400 VAT from HMRC. Therefore they might only be prepared to pay you the amount that it would have cost them to have arranged the work – i.e. £2,000.

[Author]

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