Payment of bathroom reno - I think I'm being ripped off

grubar30 said:
Asy,
Am I missing something here? If I pay for materials then why don’t I get the receipts?


He's paid for the materials, presumably out of his business account. Even if he's passing on the exact cost, he still has to account for the expenditure come tax time.

If he gives you the receipts, his accountant is going to say... What did you spend this money on? He'll say... Well, I bought this stuff for this guy, but he paid me back... His accountant will say... Um, prove that you bought the stuff, how do I know you didn't just take the thousand (odd) dollars and spend it, and the entire amount the guy paid you is income???

See?

He has to be able to account for his expenditure. As I said before, if he can't prove that you were simply paying back his outgoing monies, then the whole amount you pay him must be declared as income.

Hope that's a little clearer this time... :eek:

asy :D
 
Asy/Bargain hunter,

You guys are assuming that the final tax invoice he's giving me is for $3500 (labour) + $980 materials which equals $4880...NO!!!!.....he's only going to give me an invoice for $3500...that’s it...nothing else...no more....but he still wants me to pay the $980 for materials and KEEP the receipts.....



George
 
grubar30 said:
Asy/Bargain hunter,

You guys are assuming that the final tax invoice he's giving me is for $3500 (labour) + $980 materials which equals $4880...NO!!!!.....he's only going to give me an invoice for $3500...that’s it...nothing else...no more....but he still wants me to pay the $980 for materials and KEEP the receipts.....



George


Have you asked him for an amended invoice with the full amount?
 
i know where you're coming from. i've got a invoice in my bill drawer at the moment from a carpenter who did some work for me. i asked him for an itemised account as the it seemed very excessive. in reply he sent me a letter telling me that he did the job as a favour, the costs are correct, is out of pocket because he had to give up other jobs to do the favour and send him the money.

i am debating whether to just pay it or ask again for an itemised (time and materials) account. don't know if i'm in the mood for a fight at the moment ...

.... damn it. i'll ask again for a breakdown.

lizzie
 
Duncan,
Have you asked him for an amended invoice with the full amount?

Yes I did and he was hesitant...actually, he didn't commit an answer...that's why I rang him back and said I wanted the receipts + plus the invoice for $3500....that way I have proof of what I’m paying for...actually, he was so bent on keeping the receipts for "tax purposes" that I said mere copies would do....

blossomoz,
Perhaps he personally pockets the sum over & above the quote but submits the receipts in his business tax return!!!

My very point.......
 
grubar30 said:
Duncan,


Yes I did and he was hesitant...actually, he didn't commit an answer...that's why I rang him back and said I wanted the receipts + plus the invoice for $3500....that way I have proof of what I’m paying for...actually, he was so bent on keeping the receipts for "tax purposes" that I said mere copies would do....

I agree with other people that have said you dont have any right to the receipts, not even photocopies.. Pay what ever amounts he's invoiced you for and chalk it up to experience.
 
blossomoz said:
Perhaps he personally pockets the sum over & above the quote but submits the receipts in his business tax return!!!
cheers
blossomoz


It all evens out at Tax Time.. he has to declare the income, the receipts offset his costs for the job leaving him to pay tax on the just the labour component of the job and the markup on the materias. The only thing left to happen at this point is a proper invoice for the full amount has to be created.. which he appears willing to do based on grubars comments?
 
grubar30 said:
Asy/Bargain hunter,

You guys are assuming that the final tax invoice he's giving me is for $3500 (labour) + $980 materials which equals $4880...NO!!!!.....he's only going to give me an invoice for $3500...that’s it...nothing else...no more....but he still wants me to pay the $980 for materials and KEEP the receipts.....



George
Bearing this in mind, it sounds like he wants to have his cake & eat it too.

If I was in your position the way I would handle it would be to say that I am only willing to pay the amount that he has invoiced me. EITHER he give me an invoice for the total amount $4880 & I pay that, OR he give me an invoice for $3500 & I pay that, OR he give me the receipts plus the invoice for $3500 and pay him the total.

Sounds to me like the $980 was going into his pocket with no records as far as the ATO is concerned. If he only does this once a week that is an extra $50k PA he has earnt without declaring it. If he has trouble with invoicing the correct amount maybe you could let it slip that the ATO might be interested in the way he conducts his business.

Best of luck
 
It definately sounds dodgy to me. I'm not a lawyer but I didn't think you had any obligation to pay anything that is not invoiced anyway. While he does not have to give you copies of any receipts, he does have to put the amount on the invoice if he wants money for it. Might be worth asking someone knowlegeble in legal matters.

My dodgy-meter is sounding off for sure.
:confused:
 
Sounds dodgy to me aswell.

A few years ago we employed the services of a home hanyman (not a licenced anything, big mistake!) to do our bathroom. Not only was he buying and charging for twice the amount of material he needed and keeping the excess eg bags of grout but it was discovered that he was using left over material from previous jobs that he had charged other people for on our job and then charging us for them.

He had insisted that we pay as he did the job in installments which he convinced us was because he needed the cash to pay for materials. He gave us lots of hard luck stories about needing the money to pay for his kids Christmas presents ect. Of course I fell for it for a while until I realised with some good advise from friends that he was just milking us for all we were worth.

It was only discovered when I asked for an itemised account of all he had purchased and he was not able to provide them. He tried to produce a receipt for some of it but most of the receipts were months old.

To top it all of I was left with a 2cm gap where the bath meets the tiles. :confused: When I asked him what the gap was for he told me it was quite normal, that his bath at home had the same thing. I asked what if water was to get down there and he told me that would be unlikely. Obviously he never had small children who likes to put water everywhere. :eek:

As you can imagine I fired him with the job only half done but to this day I don't really know what he purchsed with the amount I had already given him.

Lessons learnt

1. Get solid quotes befor job begins.
2. Pay when job is completed not as you go.
3. Pay extra for a licenced plumber, don't use handymen.
4. Get aggrement that you can see all receipts after job is completed or as he buys materials.
 
Thank-you all the feedback and differing points of view....

This morning I transferred the total of $4480 into his account.....hopefully I'll be getting a tax invoice in the mail for $3500 (his original quote) and the receipts for the materials that came to $980.....this is what he promised to do....

In the end, I chose to show a fair hand, transfer the money and go by his word that he would send me the invoice/receipts....

Time will tell.....

PS....Good reply skater...if only I had been able to verbalise it this well at the time of his phone call.....

George
 
Hi Grubar,
I didn't know that he had only given you an invoice for $3500 and not the total amount.That changes things altogether.You see,little Jhonny gave us this wonderful creature called GST a few years ago.Your contractor is required by law to add GST to all the inputs for your reno,and then pay this amount to the tax office.It is expressly prohibited by the ATO to run his business the way he is.He is carrying on a business (of sorts) and has sold you the goods,not bought them for you.You can back it in that he has put a margin on top of his costs.HAve a look at this page from the ATO.
http://www.ato.gov.au/content/downloads/NAT3014-07-2005.pdf
Particularly look at pages 8 to 12.It deals with what is a taxable supply,what is a sale in the course of furtherance of your business,and GST free sales.I wouldn't have paid him on his word.I ti s people like this guy that give the reputable tradies like myself a bad name.I would have no qualms about mentioning the ATO to him if he doesn't play the game.

Tools
 
Tools said:
Hi Grubar,
I didn't know that he had only given you an invoice for $3500 and not the total amount. I would have no qualms about mentioning the ATO to him if he doesn't play the game.
Tools

Hey tools.....no he hasn’t yet given me an invoice for $3500 at all (not yet anyway)....he said that he would send me the invoice in the mail and that it would only be for $3500....

lol.....the more I think about it the more ridiculous it is.....its so obvious he's either dodging the tax system (i.e., not declaring the additional $980 in his final invoice) OR he's charging me more than the materials are worth and won't supply the receipts because it confirms this....or both!

Tools said:
I would have no qualms about mentioning the ATO to him if he doesn't play the game.
Tools
Will do….

Stay tuned...

George
 
grubar30 said:
Hey tools.....no he hasn’t yet given me an invoice for $3500 at all (not yet anyway)....he said that he would send me the invoice in the mail and that it would only be for $3500....

lol.....the more I think about it the more ridiculous it is.....its so obvious he's either dodging the tax system (i.e., not declaring the additional $980 in his final invoice) OR he's charging me more than the materials are worth and won't supply the receipts because it confirms this....or both!


Will do….

Stay tuned...

George
Also remember George, if it is for an IP you need his tax invoice so you can claim.
 
Gruber sounds ok to me, I have been a tradesman for 25 yrs and costs do add up, he is entitled to add a bit on.
You should get a tax invoice and then reciept for the whole amount you don`t need receipts for anything he purchased just a final amount you can claim.
These days trades have a lot of leeway in what they charge, whether or not you think you are being ripped off should not be too hard to sort out when you take into consideration "ballpark figures" I think you did the right thing to pay the bill in full.
 
Grubar,

You are indeed very trusting :)

I hope the tax man doesn't come auditing you as to why you paid that money & the tradie (who has no incentive to do anything now) hasn't provided a receipt.

Cheers,

Aceyducey
 
For an investment you need a tax invoice from the tradesman and that's the amount you pay.

If you don't have the invoice and you get audited , the ATO will reject your claim for expenses.

If you don't have the invoice ( given the circumstances , prior to payment ) I wouldn't be paying.

The amount he's charging you seems quite reasonable. Personally I wouldn't expect to get the Builders receipts unless I'd agreed to a cost plus % as a method of payment prior to agreeing for him to do the work.

See Change
 
An update on this thread for all those interested….

To recap – I had my bathroom recently renovated with an initial quote of $3500, but with the final completed cost coming to $4480 (original $3500 quote + $980 for materials). The tradie was willing to give me a final invoice for $3500 only, but wanted me to pay the full $4480. Read the entire thread for full details.

Anyway, out of my good nature I decided to pay in advance and wait for the invoice, plus receipts for materials, to come in the mail as promised. Unfortunately, they did never arrive. 3 weeks have passed, and after numerous calls in which the tradie gave b*llshit excuse after excuse that it's coming, I have finally given up chasing and wasting my time. Its time to cut my losses and direct my energies back to finishing my renovation.

For those wondering what the problem is here - I need an invoice showing full payment come tax time.

Still, I have proof of partial payment in case the tax department ever comes knocking.

That is, I have a bank transfer of $3180 into his business account but have nothing to show for the $1300 I paid in cash to him along the way (yes I know I SHOULD have firmly pushed for reciepts at the time). So if I ever get audited and they find discrepancies in my tax claims (yes, I'm claiming expenses/works for $4480!), then I’m pointing the finger firmly at this tradie.

I go down, he goes down with me.


##Edit....Name removed for legal reasons##

So what have I learnt?

Don't ever pay anything until you get the invoice. Don't be pressured and fooled into thinking otherwise. Don't be the nice guy and accommodate the other party. Let them show the same accommodating nature and respect first before you reciprocate.

And in essence, that's my real contention – the fact my good nature was taken advantage of.

I'm chalking this whole incident up to experience….and if I prove to be as gullible again then please shoot me...

The end….


George “don’t pay the ferryman until he gets you to the other side” Grubar
 
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