HTH

Dave Hill

I had a call from our VAT office about 3 months ago, they were particularly interested in how we handle MOT's and what we charged

I explained that i get charged £42:00 trade for MOT's and i pass this onto my customers (no vat) at the same price. I charge separately for checking over and taking for the test. On the invoice the labour is charged plus vat, the MOT is vat free

So if you charge your customer the same trade price for the MOT certificate with no VAT, your ok

If you make a profit on the MOT certificate ie: you pay £42:00 and charge them £52:00 and don't declare the VAT on the FULL £52:00 then your in trouble

Peter

All because I heard of a garage locally that was putting a tenner on every MOT for I don`t know how many years. He got clobbered by the VAT for over 4 grand.

They went through him like a dose of salts.

They`re certainly on the warpath for a pound of flesh.

Russell

When it happened to me there was not even a section in the VAT guide about this, so I only had to pay VAT on the difference, as they didn't explain it fully. But I then had a letter after that explaining from x date I had to either show as a disbursmenent (as Peter says) & labour separately, or VAT on the whole amount, & the VAT guide was updated to reflect this.

Ah, so it's your accountant that should pay

HTH
Steve

I had a vat inspection last week and this was the second subject covered after fuel. Fortunately I had been billing them correctly.

Glyn

The original wording of the VAT guide implied that you would only have to charge VAT on any extra amount you charged - seems to me they have now moved the goalposts.

I did not feel inclined to show my customers what I was making on the MOT charge so decided this was the best way. I charge labour for inspection and arranging the test and charge VAT on that.

Regards,

Steve

John.

Did you learn anything about the way you are invoicing fuel. I have often wondered about this. I only invoice fuel out when we add a fivers worth after a drain out job, so it’s not a huge issue for me (hopefully)

Cheers

Dave Hill

The questions on fuel referred to how many vehicles do we run, how we claimed for business use of own car etc.
Like yourself we do not buy or sell large amounts of fuel.

Glyn

At the risk of sounding like a Muppet (no surprise) my concern about invoicing fuel is.....

If I stick a fivers worth of fuel into a customers car, Do I invoice it out at £5.00 + VAT or £5.00 zero VAT or £5.00 including VAT.

I don’t even know what the VAT rate is on various fuels. I do know that the heating oil that I am heating the forecourt with is subject to 5% VAT.

As you can see I am not that clued up in these matters.

Cheers

Dave Hill

Cheers,
John.

I must admit i am a little baffled by both your comments, you seem to be making hard work of a simple situation (or am i reading it wrong )

We tell our customers:
We do not carryout MOT's at our workshop....BUT

You can take the vehicle for test yourself and risk a failure or we can arrange a test for you, and take it for test

This is an example of one of our invoices:

MOT1: Carryout a pre MOT inspection 0.5 hours £21:00

MOT2: Take vehicle for MOT test, wait with vehicle while the test is carried out 0.75 hours £31.50

MOT3: MOT Certificate £46:00 (Trade Price)

Labour Total £52.50
VAT @ 17.5% £9.18
Sub Total £61.68
MOT Cert £46.00

TOTAL £107.68

During the pre check we will replace tyres, wiper blades bulbs ect FOC (they just pay for parts, tyres etc)

If it needs additional work (ie: suspension arm) after our inspection, that will be carried out at extra cost

We have been working this way for over 10 years with only the odd query on the charges for checking and taking

The confusion seems to be with some members trying to get the full price MOT fee out of the customer.........what the hell, just let them have it at the trade price, why make life difficult......my customers alway come back year after year, saves them a shed load of grief and stress

Peter

Merry Christmas Lads

Cheers Andy E

Regards
Dave

Most customers wont even notice you are charging them vat on full amount as all the rest of the bill has vat added. the other alternative is to pay the vat yourself and just charge customer a net price that will equal mot full price when VAT added.

Save lots of complicated explanations.

Mike