CPA Bulletin

42 CPA Bulletin > February 2024 www.cpa.uk.net Q&As: 1 q&a s You can certainly offer them insurance cover by way of a subrogation waiver under your own policy, provided you have obtained the correct policy from your insurer which allows this. You may wish to discuss this with your insurance broker first if there are any aspects of the waiver you are uncertain about. You can proceed, once you have understood the workings of the waiver policy - most companies charge their customer 15% - 20% of the hire rate for this facility. If the customer has not got hired-in plant cover, they could look to obtain a ‘short-term’ hire policy from any reputable insurer whilst the plant is in their care. There are a number of insurance brokers, whose contact details can be found within the ‘Insurance’ section of the CPA’s website. I am happy to discuss this further if you wish. We have a customer that wants to hire plant fromus, but they do not have any ‘hired-in plant’ insurance cover. What is the best way to proceed? Should we use our own insurance, then charge them for it? When the government introduced a law stopping bank’s from adding a ‘handling’ charge for when a credit or debit card was used, I noticed that HMRC’s website stopped imposing a ‘handling’ charge for credit cards but appear to continue if a debit card is used. I have noticed that HMRC has charged me a 0.17% non-refundable fee when I used my debit card. Is this legal? When the government introduced this legislation in 2018, it was designed to prevent customers incurring additional charges, but the legislation was aimed at consumer customers and not businesses. I can only presume that the charges you have incurred fromHMRC is on the basis that these are through/related to your business, and so, in their eyes, would be outside the scope of the legislation; however, you should confirmwith HMRC that that is their rationale in issuing those charges. When do you normally ask a new business customer to sign the terms? Do we need it physically signing or can we send it electronically? As a rule, you should always attach a copy of the Model Conditions (‘the terms’) and the Hire Contract Form (HCF) in any email until such time as there is an established ‘course of trading’ between the two parties. The length of time that has elapsed to obtain that relationship will depend on the frequency the customer hires from you. As an example, if a customer hires from you on one or two occasions each month, then within six months the relationship should be established, and you will not need to keep attaching the terms. Instead, the terms can be attached to an all-customer email, where each customer is blind-copied into the email - and the terms are sent out. This email can go out once a year, reminding them that all current and future hires are subject to these terms. If the email is sent out requests a ‘Read Receipt’, then you know they have received it. [The Model Conditions are only used for business-to-business hire agreements.] Once the ‘course of trading’ has been established, then you can just email out the HCF. Ideally, it would be perfect if the customer (electronically) signed and returned the HCF, but this is not always possible. Instead, as long as there is some form of written acknowledgement - email or text from a duly authorised person within the customer’s organisation, confirming that the customer has accepted the HCF’s details - the machine being hired, for how long, for howmuch, etc., then that should provide sufficient evidence that a contract is in place. I hope that helps clarify the position. I was hoping you could help with a query regarding VAT Reverse charge. I have tried to find the answer myself by reading through all the information online but cannot get a definitive answer, so I just wanted to confirm that I have understood everything correctly. We had an order for the supply of plant with an operator which was subject to Reverse VAT and has been invoiced accordingly. Whilst on site, there was some damage caused by the customer and we have subsequently invoiced for this. We didn’t apply Reverse VAT to the damage charges but when our customer paid these invoices, they automatically applied the reverse charge and did not pay us the VAT. Should we have applied the Reverse charge to these invoices as well or do the damages count as a separate order? Any advice you could giveme would bemuch appreciated. Navigating through the intricacies of Reverse VAT can be complicated, but the short answer is, yes, you should have applied the Reverse VAT charge for the damage invoice too. The reason being is that as the original hire was not subject to VAT, then damage invoice will not apply either - as they relate to the same supply. VAT for the damage invoice would only apply if the original hire was subject to VAT. I hope that clarifies the position, but if you have any further questions, then please get in touch. Whilst every care has been taken to ensure the accuracy of the answers given within this section of the CPA Bulletin, no liability for any damage, liability, cost, loss and/or expense which the reader has incurred can be accepted by the Construction Plant-hire Association (CPA). The reader should obtain independent legal advice on any issue reported within the CPA Bulletin, before proceeding with a course of action.