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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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I signed a mandate for a builder to represent me in front of

Customer Question

I signed a mandate for a builder to represent me in front of building insurer for my claim under the building insurance.
The claim was successful and the insurance sent me the relevant amount which includes VAT. I then canceled the mandate (which I was allowed under the T&C of the mandate that I signed) and decided not to use that builder for the work
The builder who represented me is now asking for the VAT back saying that I am not entitled to the benefit of the VAT as he already issued an invoice for the total amount in question including VAT.
All I know is that he sent the insurers an estimate (copy of which I have) for the work including the costing and am not sure if he refers to an invoice addressed to me (which I did not receive) or an invoice which he presumably sent to the insurers in addition to the estimate.
Therefore I am not sure if I should send him the amount of VAT which he requests or not? Please advise.
Submitted: 11 months ago.
Category: Law
Customer: replied 11 months ago.
The last email which I received from the builder is as follows:From: Richard Saunders [mailto***@******.***]
Sent: 05 August 2016 14:51
To: ***** *****; John Goodwin
Cc: Anita Tamir
Subject: RE: Insurance Claim - Cancellation of Mandate No. 02334 signed & dated 31-5-16 - (64 Headley Drive Gants Hill, Ilford, Essex IG2 6LX).Dear Sir,I refer to your email below and find this situation regrettable. I have spoken with John and as we have carried out various works at your home we are entitled to be paid for the work completed. This is detailed below and in the attached invoices.• Trace & Access Works - £825 + VAT
• Cleaning out of Guttering - £250 + VAT
• Survey and Prep of Schedule - £300 + VAT – 3 Visits by John Goodwin
• 10% of net claim £15,500 - £1,550 + VAT
• VAT - £3,100You are not entitled to the benefit of the VAT. At the time of agreeing the claim there was an agreement in place for Oakleafe to undertake repairs and therefore a final VAT invoice was produced. As Oakleafe are VAT registered. We must pay HMRC the VAT as this will form part of our VAT returm, therefore you must either arrange for payment to Oakleafe or this money is to be returned to insurers and we will therefore contact them to confirm how this element of the money is to be returned by you.I understand that prompt payment by you will be made. Bank details are on the invoice.Many thanks.Best Regards *****
Oakleafe ClaimsMy second question is: As I was also charged for some work by the builder in the amount of £3,510 prior to dealing with my claim as you will see from the invoice which I will attach. The builder is entitled to these charges but the charges were greatly inflated in my opinion and I am in the process of contesting it. Can I legally do this? or just pay whatever he asks for, which seems ridiculous to say the least. The reply which I am going to send him is as follows:Dear Mr Saunders,Re: Your Invoice No. 2812 (5-8-16) - Insurance Claim (64 Headley Drive Gants Hill, Ilford, Essex IG2 6LX).We thank you for your e-mail contents of which have been noted and we write further to a consultation with our legal adviser.We are responding to your e-mail dated 5th August 2016 in the same order of which it was written.We have no objection to pay for your time and works which you entitled to, but with all due respect your charges bear no relation to the actual work that has been carried out and you cannot charge as you please, as we are not an insurance company who usually absorb such cost without investigating further, surely there must be some logic to these charges which should be revised as we feel were mistaken or purposely greatly inflated as a result of you not doing the work and therefore we contest to the level of some of your charges mentioned in your invoice No. 2812, for the following reasons:1) Trace & Access Works - as you are probably aware, this was carried out by Steve who spend less than 1 (one) hour to lift couple of floor boards and dismantle the radiator in the bedroom which we expect him to fit back, hence a fair cost around £200 + Vat would be more than adequate and should apply.2) Cleaning out of Guttering - again this was done by a young men whose name is ***** ***** to us, the cleaning was attributed to a length of 2 (two) feet of guttering which took less than 8 (eight) minutes, hence a fair cost around £75 + Vat would be more than adequate and should apply. (Just so you know, I have taken a photos indicating when your workman has arrived/started the work and when he finishes/left).3) Survey and Prep of Schedule - an initial survey cost has never been discussed and should never been charged as is customary in the trade, unless confirmed in writing, just the same as it was in our previous claims which you have submitted to insurers on our behalf. Furthermore, only 2 (two) visits were made after signing the Mandate dated 31-5-16 one of which was while attending the premises with the Loss Adjuster on 27th July 2016, please specify the amount charged per 1 (one) visit, hence this charge should be reduced and amended accordingly.4) 10% of net claim £15,500 - as requested and in accordance to the T & C this (£1,550) will be paid to you in due course.
Expert:  Ash replied 11 months ago.

Hello my name is ***** ***** I will help you.
Is your second builder registered for VAT?
Alex

Customer: replied 11 months ago.
Not sure yet as I am in the process of having a few diferrent estimates. Asuming I employ a builder who is registered for VAT then what? and what if he is not registered for VAT?
Expert:  Ash replied 11 months ago.

If they are registered for VAT then you are ok.

If they are not registered for VAT then you are not entitled to keep that element. That element of VAT would need to be returned to your insurers.

You cant claim for something (VAT) which you are not entitled to do so.

Can I clarify anything for you about this today please?
Alex

Customer: replied 11 months ago.
Dear Alex,
Your answer is not very clear and I fail to undrstand how the VAT amount which my present builder ask for it back is to do with a new builder which I will employ and who will probably give me a lower quote.
Expert:  Ash replied 11 months ago.

You are only entitled to VAT if your new builder is VAT registered.

In short that is it. You have received VAT element, so if the new builder is not registered for VAT you are not entitled to keep that.

Does that clarify? Alex

Customer: replied 11 months ago.
Furthermore, In principle the question is: My new builder who will be registered for VAT gives me a quote of for example £12,000 + VAT (£2,400) £14,400 and my present builder's quoted me £15,500 + VAT (£3,100) = £18,600 will this matter?
Expert:  Ash replied 11 months ago.

Then you need to return £480.

This is the overcharged VAT amount.

Does that clarify? Alex

Customer: replied 11 months ago.
Did you mean £700? Please do not forget that I have already been paid the full amount by the insurer as per my first builder's quotation.
Expert:  Ash replied 11 months ago.

Yes I realise that. You only have to repay the VAT element of the overpayment.

Does that clarify? Alex

Customer: replied 11 months ago.
Thank you for your clarification. Also in accordance to the T&C, you have not answered my question whether I can chalange the charges by my present builder which anyone could see are greatly inflated?
Expert:  Ash replied 11 months ago.

No you can't because you accepted them. You could have gotten a number of quotes for the work to be done.
If you are speaking in relation to the invoice then yes you can challenge this under the Consumer Credit Act 2015 by arguing they are unfair.
Does that clarify? Alex

Customer: replied 11 months ago.
I was referring to the amount £3,100 which is mentioned in the invoice to me.
Thanks again for your clarifications which satisfied me.
Customer: replied 11 months ago.
Sorry I meant the invoice for £3,510.
Expert:  Ash replied 11 months ago.

Yes you can argue its unfair under the above Act.

Can I clarify anything else for you? Alex

Customer: replied 11 months ago.
No and thanks again. You have been quite helpful !
Expert:  Ash replied 11 months ago.

If I could invite you to rate my answer before you go today please, otherwise the site does not credit me for the time spent with you today. Thanks and good luck. Alex

Ash and other Law Specialists are ready to help you
Customer: replied 11 months ago.
Sure, go ahead!!
Customer: replied 11 months ago.
My rating would be 8.5 out of 10.
Customer: replied 11 months ago.
Dear Alex,
I have a few more question about the same subject and I am wondering wether I will be charged for that?
Expert:  Ash replied 11 months ago.

Assuming its directly related you can ask follow ups for free. I am in Court so I may not respond straight away.

Customer: replied 11 months ago.
it is directly related. Take your time.
Expert:  Ash replied 11 months ago.

Sure.

Customer: replied 11 months ago.
Good morning Alex,
In continuation to our recent correspondence. I am just wondering if my present contractor has the right in charging me for some initial work such as "Trace & Access" of the water leak and for 2 visits to the property in question etc. even though he got paid 10% of the total amount claimed as stated in the MANDATE which I have signed at the time and which was sent to you, (see paragraph 4,5 &6 in particular). Be advised that in the meantime I have paid him all the relevant charges after reducing his fee for these charges.
Expert:  Ash replied 11 months ago.

If he did work and you instructed then yes.

But if you have paid for that element of work - then no

Does that clarify?

Customer: replied 11 months ago.
Sorry, I have paid for this work as I was sent an invoice and was asked to do so. My question is, are these charges separate or they are already incorperated in the 10% which I have already paid, if they are incorporated in it, then I feel that I have been charged twice for the same thing. Please clarify.
Expert:  Ash replied 11 months ago.

Separate if you have paid for it already.

Customer: replied 11 months ago.
Assuming that you have read the mandate, in other words according to the mandate the contractor was entitled to his 10% in addition to the other charges, is my understanding correct?
Expert:  Ash replied 11 months ago.

It says they retain 10% of the awarded sum plus VAT of the total sum. That is clause 5

Customer: replied 11 months ago.
In that case it would mean that I was not charged twice for the same work, is that correct? that is basically what I need to know.
Expert:  Ash replied 11 months ago.

Yes, that is what I said. You cant pay a fee twice for the same thing. That would be a 'windfall'

Customer: replied 11 months ago.
Thanks and I appreciate your further assistance in this matter. I therefore have no further questions.
Expert:  Ash replied 11 months ago.

Great. All the best.