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NetBlindPaul

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Ok, lets throw a cat amongst the pigeons. Since part P we now have what is called a "Domestic installer" and amongst the electrical industry they are not classed as electricians because they do not go through formal training such as apprenticships and have minimal training but at the same time many electricians with 4 year apprenticeships are also domestic installers. In both cases completion of the electrical regulations is required, currently 18th.

Ideally they turn up in their works van and show registration with NCICS and you can check this online.
Just remember that having an 18th edition qualification does not make them competent at the work, it just means that they passed an open book multi choice exam on the 18th.
Too much emphasis is placed on holding the wiring regs qualification.
I’ve even seen it as a requirement for electricians neded for machinery work, where it is pretty much irrelevant as machinery work is excluded from BS 7671.
 

sometimewoodworker

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And, by the way, unless you have a time machine, or I’ve slept in my hospital bed for like 6 years, we are still on the 18th Edition of the Wiring Regulations.
No, I’m not the Doctor, I misremembered a 5 hour discussion by several rather erudite individuals 3 months ago of revision 2 to the 18th edition as a discussion on the 19th, sorry. I thought that that revision was introducing the Domestic Installer category as it was being mentioned in a not very complimentary way.
 
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Distinterior

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That is a rather interesting conundrum. It is also a rather difficult one to decide much less be sure of.

If a business is registered you will be charged VAT. Simple open and shut case.

If a business is not registered you will not be charged VAT. Again simple open and shut case.

However it is the unregistered business that will pay VAT on items they buy that they cannot reclaim or pass on, so they pay VAT. But can only charge a price that returns a profit and, of course, don’t/can’t add VAT.

So as the ultimate consumer my bill is VAT free from my electriction. What his costs are and where his materials come from are irrelevant to me. He may be buying from small businesses (probably not but certainly possible) and so on down the supply chain, so it’s conceivable that nobody in the chain is VAT registered Q.E.D. my payment is possibly totally free of any VAT component at any point.

So I can say that it’s totally VAT free, I didn’t but could if I were able to follow the supply chain.

Because someone down the chain paid something doesn’t philosophically mean that I paid it, don’t you agree? In fact I think HMRC may specifically, and rather insistently, say that I did not. :geek:

This is an interesting technical point to consider while locked down.

Now the whole discussion could have been avoided had I said that “I will not be paying VAT on my bill for the work from my electrician” but “VAT free” is shorter, though a little less accurate, isn’t it?

This is not intended to be a knock down drawn out fight but rather a point for reasonable intellectual debate.

I have read your reply twice now STW and I'm still struggling to understand how you think you are not getting charged a certain amount of VAT....??

Let's just say that the job requires the non VAT registered Electrician to buy materials at a Trade price that cost him £200 + VAT.
He has obviously had to pay out £240.
Let's say he marks up those materials by 30%, so the cost to you for those materials are £312.
His invoice/quotation to you is £900, so his labour is £588.

If you pay him the £900, you have in fact, actually paid him £40 in VAT as part of his invoice.

He cannot show VAT on his invoice in any way because he is not a VAT Registered business, but that does not mean YOU HAVE NOT PAID IT.
 

NormanB

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We don’t call it discretionary load, when we calculate the potential for multiple loads and the expected actual maximum load, we do it by applying what we call diversity.

Of course you are perfectly correct - I just got my worms muxed up - brain fart episode.😉😂
 

J-G

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Now the whole discussion could have been avoided had I said that “I will not be paying VAT on my bill for the work from my electrician” but “VAT free” is shorter, though a little less accurate, isn’t it?
In my opinion no. It is simply an inaccurate statement. To explain further will probably take a detailed example ---- and, as I type, I see that @Distinterior has done an excellent job of just that.

Had you said that your supplier would not be ADDING VAT because at his turnover he doesn't need to and hasn't requested VAT registration, that would be more accurate - sorry I'm a pedant and was registered for Purchase Tax before VAT came in and am registered for VAT even though my turnover doesn't require it. I requested registration because most of my customers can re-claim it so ultimately they benefit.

Effectively the bit that you got wrong is "However it is the unregistered business that will pay VAT on items they buy that they cannot reclaim or pass on..." as @Distinterior has shown, of course they can (and do) pass it on - well if they want to remain in business they do :)
 
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Jelly

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regardless of the vat or arguments over regulations what I’d really like to know is if @Jelly is glad he asked 🤔 😉

You know full well the answer is an emphatic NO, @Doug B :p

I really don't think my question was unreasonable.

But the content of this thread makes me very clear that it's wasn't a sensible to ask for advice from UKW on this area, as it arouses such strong emotional responses in other posters.

You live and learn.
 

sometimewoodworker

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I have read your reply twice now STW and I'm still struggling to understand
I am paying the price that the electrician has quoted.

That price has no VAT component. That he may have paid VAT on the items he supplied is not something that concerns me, that he may use part of the money I pay him to pay the VAT that he may be paying does not mean that I am paying VAT.

To give a hypothetical example. He may have a mistress or boyfriend that he is paying, he may use money I pay him to pay them, by the logic used that would mean that I am paying his mistress/boyfriend. The expenses he would incur by paying that person would increase his living expenses so increasing the prices he needs to charge. I doubt that it should be said that I am paying them. How is that case different?

Once again he may not have paid VAT on anything he uses. It certainly cannot be said if he has or not without asking him.
 

AJB Temple

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I am paying the price that the electrician has quoted. That price has no VAT component.

The fact that you choose to pretend that you are not paying VAT does not alter the fact that you are. If tax is a component of the price you are charged, which it is, then you end up paying VAT. You can call it whatever you like, but some of your money has definitely ended up in government hands.
 

Jelly

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Sorry Jelly!.....I apologise for contributing to taking the subject of your post off track.
No worries, whilst the tax argument does seem emotive it's actually quite amused me.

I get where you're coming from, as buying from small businesses often seems to be cheaper in practice.

But on a mathematical level, multiplication is commuative, to put that into a concrete example:

Say the base cost of goods supplied is £100, they're VAT-able at 20% and both electricians are going to apply a 35% markup:​
VAT Registered Electrician: (£100 × 1.35) × 1.2 = £135 × 1.2 = £162​
Non-VAT Registered Electrician: (£100 × 1.2) × 1.35 = £120 × 1.35 = £162​

I suspect the reason your small business electrician is cheaper is that they have lower overheads, and thus need not charge the same markup in order to make a profit they feel is reasonable.
 

J-G

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Say the base cost of goods supplied is £100, they're VAT-able at 20% and both electricians are going to apply a 35% markup:
VAT Registered Electrician: (£100 × 1.35) × 1.2 = £135 × 1.2 = £162
Non-VAT Registered Electrician: (£100 × 1.2) × 1.35 = £120 × 1.35 = £162
Again not quite correct.

It's good to assume a level playing field and therefore ignore the possibility of trade discounts which may or may not be passed on but you have omitted a labour element and ignored the fact that the VAT registered Electrician can re-claim the VAT that he has paid to the materials supplier.
VAT Breakdown.png

Therefore the true end user invoice value should be calculated thus :
 

sometimewoodworker

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The fact that you choose to pretend that you are not paying VAT does not alter the fact that you are. If tax is a component of the price you are charged, which it is, then you end up paying VAT. You can call it whatever you like, but some of your money has definitely ended up in government hands.
No it hasn’t.
My money ends up in the hands of my contractor.
It is then his money, not my money.
His money ends up in government hands, not my money.

Tax is not a component of the invoice price, but is a consideration it arriving at that price Semantic but significant difference.

There is no pretense to my not paying VAT, it is a fact that I am not paying VAT, that my supplier maybe using the money I have paid him (that is his money) to pay his VAT is not the same as my paying VAT.
 
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J-G

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There is no pretense to my not paying VAT, it is a fact that I am not paying VAT, that my supplier maybe using my money to pay his VAT is not the same as my paying VAT.
I now have to assume that you are a member of the 'Flat Earth' Brigade ! 🤣🤣🤣🤣
 

AJB Temple

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No it hasn’t.
My money ends up in the hands of my contractor.
It is then his money, not my money.

Nope. It is not "his" money. He is legally obliged to collect it on behalf of HMRC. At no point is it "his". If he fails to hand it over (after deducting his input tax - if any) he is committing an offence.

I can see the attractions of your argument. Once you have handed over your taxes to the government or local authority, everything they do for you is free. :) We all rationalise taxes in our own ways. Personally I think politicians are clueless about spending money so would prefer that they did not have control. Of course, in an ideal world I would rather pay no tax at all.
 

sometimewoodworker

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Nope. It is not "his" money. He is legally obliged to collect it on behalf of HMRC. At no point is it "his". If he fails to hand it over (after deducting his input tax - if any) he is committing an offence.
You are wrong. He is NOT VAT regestered. So he is NOT collecting tax on behalf of HMRC

If he were registered then your statement would be true and he would be an unpaid HMRC tax collector as you describe.

BUT since he is not registered he can not, and does not, charge VAT so all the money he gets from me is his. If he is buying items that are taxed he is paying that tax with his money

using J-G’s exam graphic
0CBE5749-DF02-48D6-9C8A-2F9A6E916C70.jpeg

the £282 charge includes VAT to pe paid to HMRC
the £262 charge does NOT include VAT to pe paid to HMRC
 
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AJB Temple

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:whistle::p It appears I lost interest. No need to shout though. Oh well, such is life. Either way HMRC got their hands on some tax and it was your money that paid for it in the end as the final consumer who paid the gross bill.
 
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