Date of issue: 22nd September 2004

VAT ALERT FOR VEHICLE REPAIRERS

Independent vehicle servicing and repair businesses are being advised to put their businesses through a 'VAT MOT' to avoid large bills for unpaid VAT.

Chartered accountants Clement Keys, Birmingham says Customs and Excise announced a change to the VAT treatment of MOT test fees back in 1996. Businesses likely to be affected by the directive are garages that arrange MOT tests for their customers, but do not actually carry out the work themselves.

"The issue is whether garages charge their customers an amount over and above what they pay the test centre for conducting the MOT test," says Steven Simmonds, VAT director at Clement Keys, Birmingham.

"This is not a new problem but it has come to our attention that garages could still be accounting for VAT incorrectly and could therefore face a demand for unpaid VAT."

To help garages decide what action to take Clement Keys, Birmingham has developed a simple checklist.

Businesses are advised to discuss the matter with their usual tax/VAT adviser or contact Steven Simmonds at Clement Keys, Birmingham for an informal chat.