How to avoid the VAT fraud scam used by Cowboy Builders

Avoid VAT fraud by cowboy builders

How to avoid the VAT fraud scam used by Cowboy Builders

How to avoid the VAT fraud scam used by Cowboy Builders

You are probably the same as me when it comes to the issue of Cowboy builders and Rogue traders.

I am absolutely sick to the back teeth about reading and hearing about them albeit they are a blight on our society, they are there and we will have to live with that fact, we are never going to be able to stop them operating. Why can’t we stop them operating! it’s because the public love a deal.

It’s a fact folks, a large percentage of the great British public love to make a saving, I hear it all the time in this job, they are promised this that and the other and came up with nothing. It’s a continuous swan song and as long as this continues these con men are going to exist!!!

It one of the great virtues of democracy that you can select who you want to work for you, it’s your freedom of choice albeit it is not always done correctly. This freedom breeds a problem in that innocent people who are not looking for a deal can be caught up in this web of deceit.

The majority of these so called deals are scams operated by very intelligent people who are expert at taking the money out of your pocket; let’s look in detail at one of the most classic scams of all time, the VAT fraud scam.

The offer is made that they will do your job and not charge you VAT, if you think about it they are saying they are not going to pay the VAT man.

Now that in itself is a big saving for you, that’s a twenty percent price cut, very nice if you can get it. The question that should be asked and never is, is how do they do that, the answer is very simple,

The very first thing to be aware of is they will give you nothing in writing.

It will always be a cash job with money up front.

Paying VAT on materials is unavoidable, the VAT is automatically charged at source by the material supplier, the only VAT saving that can be made is on the labour.

They will use cheap shoddy materials and unskilled people do the work, now it goes without saying at some stage you are going to question the finished elements of work as it will not come up to an acceptable standard, this is when the rows start and this builder packs his bags and walks away, he has been waiting for this moment you have inadvertently made his day. He has his money up front and he knows you cannot take legal action against him because you have become a part player in this tax evasion scam how on earth can you stand in any court and try to explain to a judge what a bad man he is when you took part in this scam. By trying to make a saving the only thing you have certainly done is made a rod for your own back.

Forget the deals, nobody does anything for nothing one way or another the person making the offer of a deal is going to make money, and that’s coming out of your pocket. Step away refuse these offers it’s just not worth it.

How to avoid being a victim

Most businesses are good guys and operate within the law. It is only a minority that are committing this type of fraud. However there is a quick way to avoid becoming a victim of this type of VAT fraud. If a builder claims to be charging VAT for the goods or services they provide then

  • Ask for a VAT receipt or invoice. They have to legally provide you with this if they are charging you VAT. If they can’t then they are breaking the law.
  • Make a note of the VAT number. The invoice should contain clear details of it.
  • Check that the VAT number is genuine by checking it online.  It will take just a few second and will show if the VAT number is genuine and registered to the trade in question.

What should you do if you suspect VAT fraud?

If you suspect that a building firm or trade is avoiding paying VAT, or charging VAT when they aren’t VAT registered, you should report them anonymously to the HM Revenue and Customs (HMRC) Hotline. You can report online here or by Freephone on 0800 595 000.

Don’t be a victim, always play it safe and if you have questions ask the builder or trade those questions, you are legally within your rights to do so.

Share this post

Comments (2)

  • Listen to Ron Pye on Cowboy Builders - BBC Radio 5 Live Reply

    […] Ask for a VAT Number. Any trades person who has a decent reputation and can prove that fact will be registered for VAT. You can check their VAT credentials via VIES VAT Number validation service FREE of charge HERE. If you are unsure or their credentials or they do not check out, do not hand over a penny of your cash. Read our full post on Trade VAT fraud. […]

    November 11, 2015 at 2:35 pm
  • Anna Reply

    It’s a shame but it’s true, there are an astounding number of these ‘cowboy builders’ out there so when contracting builders you really do have to be savvy even if most businesses are good guys and operate within the law. You offer some really sound advice here, it’s just the kind of article people should read to ensure that they don’t end up victims.

    January 20, 2016 at 3:34 pm

Leave a Reply

Your email address will not be published. Required fields are marked *