# VAT on labour?



## boogaloo (9 Sep 2005)

hi all, 

just wondered what the VAT rate is on labour? Got my car fixed yesterday at Ford garage and was charged 21% VAT for labour.
I had it in my head that it should only have been 13.5%, anyone know where I can find out for sure?

thanks.


----------



## stuart (9 Sep 2005)

corected see below


----------



## boogaloo (9 Sep 2005)

It was just to 'plug' the car in to the diagnostics machine, no parts put in yesterday.

The invoice states it all as labour, but has 21% VAT.


----------



## dam099 (9 Sep 2005)

stuart said:
			
		

> It depends onthe amount of materials/parts charged
> 
> If 2/3 of the value of the invoices net amount was labour then it isall at 13.5%
> 
> ...


 
The 2/3 rule applies where the cost of materials exceeds 2/3 of the value so if the labour is over 1/3 it would not apply. However in any event the repair of Motor Vehicles is not covered.

"Services taxable as supplies of goods (the “two-thirds” rule) 3.9 A transaction which may appear to be a supply of a service is nevertheless taxable as a supply of goods if the value of the goods, that is their cost excluding VAT, to the service contractor used in carrying out the work exceeds two-thirds of the total charge, exclusive of VAT. For example, where the cost to the repairer of materials used in the repair of a washing machine is €120 exclusive of VAT, and the total charge for the repair work is €150, the 21% rate applicable to the materials applies, rather than the 13.5% rate which normally applies to repair services. It should be noted that the repair and maintenance of motor vehicles and agricultural machinery is not subject to the "two-thirds" rule."

Its some time since I have seen an invoice for motor repairs but IIRC they normally split the labour and parts and charge VAT at the appropriate rate for each.


----------



## Joe1234 (9 Sep 2005)

dam099 said:
			
		

> Its some time since I have seen an invoice for motor repairs but IIRC they normally split the labour and parts and charge VAT at the appropriate rate for each.



I have recently seen invoices for motor repairs and the parts and labout are still shown seperately and the relevant vat rates applied to each.


----------



## boogaloo (12 Sep 2005)

There was no parts, it was all labour, so no split on the invoice.  Does anyone know where I could find out for sure what rate I should have been charged?

thanks.


----------



## jem (12 Sep 2005)

if it was just labour you should have been charged 13.5%.


----------



## boogaloo (12 Sep 2005)

thanks Jem.  I thought it should be 13.5%, but when I asked the girl at reception who was doing up the invoice, she said no, 21% was right. Thought I had better be sure of my facts before agueing.  Have to take it back on Thursday to get a part fittted, which will take another hour's labour, so don't want to get caught a second time.  I understand that there will be 21% VAT on the part (should be approx 57 euro in total for the part), and another hour's labour at 72 euro per hour ex VAT.  In my understanding, total per hour for labour, including VAT should be 81.72, and not 87.12 euro as I was charged last time.

thanks.


----------



## legend99 (12 Sep 2005)

"72 euro per hour "

I'd say you'd get an hour of labour on the space shuttle for that...


----------



## boogaloo (12 Sep 2005)

"I'd say you'd get an hour of labour on the space shuttle for that..."

Tell me about it Legend, I nearly choked when I asked how much labour was on the phone..... I'm definitely in the wrong business anyway 

Had to take it to main dealer this time as no other garage seemed to be able to figure out what the hell was wrong with it, so needed to be put on main dealers machine to diagnose problem.....unfortunately, it doesn't end there and I have to get the part fitted there too as it needs to be calibrated on, you guessed it, the main dealers machine.....

Good job I managed to get 'cheap' petrol at weekend, 112.9c a litre.....that saving might pay for 5 minutes of mechanic's time!


----------

