Just got the Landy back from the garage, along with the bill.

Labour: £150
Parts: £185.45
Sub total: £335.45

20% VAT: £67.09

Total: £402.54

Should I really be paying the VAT on parts ordered? I assume the garage already pays VAT, which is included in my parts cost, so why am I being charged for it on the gross?

Unfortunately, yes!! VAT is payable by the Registered person on all monies - received and spent. As the person is liable to pay the VAT, they pass it on to the consumer. They don't get to keep it though - it goes to HM Revenue & Customs. In effect, VAT creates a chain that makes the 'end user' the only one who pays VAT!! That'd be you in this case

So, presuming everyone in the chain is eligible to pay VAT (and so will charge it) your parts are even worse than you thought!!

Raw materials for parts purchased - VAT paid by manufacturer
Delivered to stockists - VAT paid by delivery company and charged to stockist
Stockist sells to garage - Stockist charge VAT to garage
Garage fits parts - garage charges VAT to you

So, manufacturer gets VAT back from Stockist, Stockist gets it back from Garage, Garage gets it back from you.....and you're screwed for the money

So long as it isn't an MOT, which are VAT exempt for some reason.

one slight error
the garage claims back the vat paid to its supplier.on its cost price... then charges vat to the customer on the retail price , so the garage pays vat on its markup,

every business , or self employed registered person is paying vat on their income before you look at other taxation .

we hear that the self employed pay little or no income tax , but if theyre vat registered theyve already paid vat on every penny theyve earned.

thank the lord for cooking oil,

tax paid on sale of product to store, store pays tax on sale to user, user pays tax to use cooking oil.

but dont pay tax to pour into doosel tank.

(yeh Iknow, de mimis limits and stuff)