VAT on VAT?

[TV8]

If I buy a part through a garage who is fitting the parts for me, do I only pay VAT on their labour or the total. I have checked a couple of items and I think I am paying VAT on VAT of the supplied parts which apart from the unnecessary parting of beer vouchers is a concept I despise.

Thanks

[TV8]

Paul Drawmer said:

TV8 said:

I think I am paying VAT on VAT of the supplied parts which apart from the unnecessary parting of beer vouchers is a concept I despise.

Thanks

Could you give an example?

Hi Paul,
I had a part that costs £400 ex vat or £460 including. The labour to fit was £200 giving a sub-total of £660 + VAT or £759 total. I am thinking it should be £460+£230 - £690 total. Mr Darling gets another £70 this way if it is the rule?

[TV8]

Farmer said:

mybrainhurts said:

The garage reclaims the VAT it paid to its supplier.

It then charges you what it likes for the part, adds labour, then adds VAT to the total.

You're not paying VAT on VAT, anything your garage adds to the part price, then charges to you, is markup for the garage.

agreed! remember also that the garrage pays the vat total it charges you to the govt. which remings me I should be doing my VAT not tooling around on the nett!

So in my example, they are paying net VAT? ie what I paid, less what they paid to the supplier?

[TV8]

Thanks everyone. I queeried when I had the bill and they told me it was the ex-vat price and I took it at face value. It was only when I was looking at the manufacturing companies web-site yesterday, to pick either part a,b or c for the next up-grade when I realised that their prices are lower than I had been quoted. I checked with the manufacturer and these were the ex-vat prices and it is clear to me that I had been cherged the + vat price for the last item.

In total, over the next three jobs, the parts bill is £1,900, so clarity on this point is important.
Re comments about overheads, fully understand this (I work in B2B reselling) and everyone is entitled to make a good living.

Time for a chat with them.

[TV8]

All sorted. Mistake in my next quote. Not sure what the last part was but I am happy. Particularly with not paying double tax.
Thanks everyone.