Hi, need some advice. Our ‘former’ gardener has sent us a invoice for the last months work and, because we need to pay direct into his bank, has added 20% VAT. We know he’s not VAT registered we’ve asked him to provide a VAT number but he hasn’t. He has provided a letter from his advisor to say that he ’ isn’t adjusted for VAT '. ( Whatever that means). Are the rules for VAT different in France??. We still maintain that, as he isn’t registered we won’t pay the VAT. Are we being reasonable?
Presumably, you have all his other Invoices ?? Has he changed the format ??
I thought that Whoever had to quote their TVA number if they show TVA on their Invoices…
I am trying to see why it makes a difference, paying into his bank…
Be interesting to know his Siret number…
Alan, how did you pay him previously?
Hi Tim. Cash on hand.
Hi Stella, his Siret number is ******************* (edited: for privacy)
Yes we have his other invoices, none of which mention a VAT number. The issue of VAT has come completely out of the blue.
Would it by any chance say “non assujetti”? If so the advisor is confirming that he is not VAT registered.
If he’s not VAT registered he can’t charge VAT.
When you charge VAT you don’t get to keep it to buy your Christmas presents with, you are collecting it on behalf of the state and you have to hand it all over to the state. If he’s not VAT registered then he is obviously not submtting any VAT returns, there is no mechanism for him to do so without a VAT number.
I suggest you take the 20% back off and do a transfer for the rest.
I guess what he’s thinking is that he’s going to have to pay tax and social charges on it if it goes through his bank, whereas previously he hasn’t been when you’ve paid him cash, but that’s not your problem.
EDIT - since he actually appears to be registered as a CDG/gite, he may get away with paying cotisations at the lower rate in any case so I wouldn’t let your heart bleed too much.
It looks to me as though Kevin is trying it on!
For future reference… it would be worth asking to see some official paperwork before letting someone loose on your property.
Siret numbers can be checked easily enough… Gardening is not mentioned for this chap, I wonder if he was just looking for a little extra cash… I hope he has been declaring it…
and take at look at the person’s Insurance…
If the agreement was to pay him cash (presumably for a reduced rate) then I can see why he might ask for an additional % as he would normally have to account for any payments that go through his bank account so in effect would be out of pocket as it were.
Very many thanks for that Annna. That’s exactly what we’re thinking, if he hasn’t got a VAT number then he’s not registered so can’t submit a VAT return.
We have already paid him the balance minus the VAT , but he’s pestering us for the VAT.
Don’t you have to account for all of your earnings?
We rarely do any work for cash but if we do it is under the following conditions -
Cash means cash, ie the client cannot change the agreed payment method.
Payment is made once the work is completed.
Apart from anything else the guy hasn’t thought it through. He may feel he’s made a problem for himself but having an invoice on his system with VAT added, when he’s not VAT registered, is not going to solve it, it’s just going create a new problem and potentially serious problem for him. You don’t mess with VAT, the fisc take VAT fraud seriously.
If he wants to find a way to bump the bill up a bit, that’s not a clever way to do it.
He is registered for B& B type activity not for gardening so he is technically not allowed to charge you at all. You aren’t allowed to employ him either, unless you pay social charges etc (eg by CESU), of course…
You can’t actually register as a gardener under micro entreprise, gardening is agricultural and has to be registered under a similar but different scheme called micro-BA, or micro-bénéfice agricole. Presumably he would be registered for property maintenance, if he was at all, that’s how most Brits get round it.
The stunts some Brits pull under the cover of a micro entreprise are enough to make your hair curl.
There’s a lot of it around and most of the ones I’ve met don’t believe that they are doing anything wrong.
I see why he is doing it but he is treading a very dangerous path.
There are certain limits on the cash you can legally pay per transaction without attracting attention of the fisc.
If you have records of the dates and amounts you have paid him, throw it back in his court and write to him AR listing them and netting down the TVA (a simple mathematical calculation) including this payment and advise him that you will pass the information to the appropriate authorities since his invoices have not complied with the law (in that he is required if TVA registered to include his registration number or the appropriate wording if he is not.
Either way, he is in deep doodoos and you hold the upper hand.
Don’t give in!
If, by some remote chance he now finds himself liable for TVA, he is duty bound to issue TVA only invoices for those accounts rendered on which TVA is now due. But like HMRC in the UK, there are mechanisms in France to request the fisc to rule on the issue if the TVA only invoice (or any other for that matter) does not appear to comply.
Woe betide him if he wakens the sleeping tiger!! The penalties as other have said are huge including significant fines and/or imprisonment. His disrespecting of French law could also mean withdrawal of his rights to FOM leading to his deportation.
See here .
He is being very silly - especially seeing anyone can find out all about him from his siret number. If he were shopped (as happens) he would be bang to rights.