The builder never gave us a final invoice. What is our position?

H. I have 2 questions. My Mother lives with us. She broke her hip and is unable to use the stairs in our property. She paid us to convert our lounge into a bedroom and for an extension to replace the lounge. The work is licenced and completion certificate applied for. The work was done by a British builder (he hired a Spanish company for the concrete pouring. I do not know the name of the company). The builder was paid in stages (no contract) with the promise of a final invoice to include IVA. I did not receive an invoice. I have not been able to trace the builder and believe he has returned to England. My questions are 1) Would the money from my Mother be seen as a gift by the Tax Office 2) What is my position regarding no invoice Thank you

Hi John

I would not worry too much for the tax office, it is unlikely that the will chase for this. What is important is that you will have to register the extension at some point and for that purpose you will need to have the license (original). If you cannot get this you will be able to substitute by an architect’s certificate stating the works are more than 4 years old.

Regards

You might want to report to the Tax Office by means of a written notice the fact that you were never given invoices, clearly stating the amounts paid together with the breakdown of VAT. You will have to provide proof in the form of receipts, bank statements, etc, that that these amounts were paid.

By doing this, you will be able to offset these costs when calculating the Capital Gains Tax Liability if you ever decide to sell your property.

If you decide to do nothing about it, in my opinion, the Tax Office will chase the builder (not you) if they decide this must be considered as a gift. However, issuing this written notice should put you on the safe side.