VAT in Consumer Prices

[MikeLee]

Good Morning

Please could you confirm whether or not a business selling goods or services to a consumer is required to state its prices inclusive of VAT?  If so, are you able to point me to the relevant regulation?  Alternatively is a business allowed to quote a price as £x + VAT.

Thanks a lot for your help

Mike

[Spidersong]

It depends on the type of consumer and whether they are likely to pay the ‘full price or not’ but generally a retailer selling to the public is required to show the price inclusive of any taxes etc that the majority of customers will be paying.

The most relevant legislation is probably ‘The Price Marking Order 2004’ https://www.legislation.gov.uk/uksi/2004/102/contents/made

this may also help which is a recent discussion on the Advertising Standard Authority Code of Practice which also states that prices should be displayed inclusive in retail situations:https://www.asa.org.uk/news/to-include-or-not-to-include-vat-in-stated-prices.html

[MikeLee]

Thanks very much indeed.  That’s really helpful.  So, (and you may think this a silly question with an obvious answer!) if a builder (limited company registered for VAT) quotes on his Schedule of Works against individual items the cost as being, say, “£1,000 (inc VAT)” he should not be adding VAT again to the sub total of all those items, meaning that item (and other items similarly described) is costing £1,200.  One further point, the builder admits having reclaimed the VAT paid to his supplier, as input tax. 

I want don’t burden you with too much detail, but I’m happy to explain this further – it’s the subject of a civil dispute – if it’s of any interest…

Thanks again

Mike

[Spidersong]

Yes, if I had a quote or schedule which told me that the cost of goods was “£1000 (inc VAT)” then that is what I would be expecting to pay for the goods. And if the agreement I had with them was that charges would cover the suppliers cost of goods then I’d expect that to be the actual cost of the goods to them which would be the VAT exclusive amount.

[MikeLee]

Brilliant!  Thank you so much for your help…

Mike

[Author]

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