Originally Posted by
Oranoco
How can you charge for VAT against an item that has already had the VAT paid against it?
Genuine question
If you are VAT registered you have to charge VAT on everything you sell with the exception of a few NON VATable items like an MOT.
So if you buy a part for 100 quid + VAT, ie 120, and you sell it for 120 then that must be plus VAT too so becomes 144.
But bear in mind that is the garage making 20 quid, as they will claim back the vat that they paid.
So if the garage isnt marking up the part, they would buy for 120 including vat, and sell for 120 including vat, and they would net the two off, so the vat you pay them cancels out the vat they paid in the first place.