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Where Taxpayers and Advisers Meet
Partial VAT business
I own a car repair garage and MOT testing . I am not VAT registered. This year my taking could exceed £85000 mainly due to the increase of MOTs which they are VAT exempt.DO I need to become VAT registered . Thank you
Re: Partial VAT business
Assuming that you're either an approved test centre, or an unapproved garage that is meeting the disbursement criteria detailed here: https://www.gov.uk/hmrc-internal-manuals/vat-taxable-person/vtaxper48000, the MOT test fees are outside the scope of VAT.
This means that they don't count towards the £85,000 VAT registration threshold.
Bear in mind that the £85k is over a rolling 12 months, rather than being aligned to your accounting/tax year. So anyone who is close needs to be monitoring it regularly throughout the year.
(Although I assume this doesn't apply to you - for completeness, where an unapproved garage takes their customers' vehicles to an approved test centre, but fails to meet the disbursement criteria above, the MOT charges would be subject to VAT and count towards the registration threshold.)
This means that they don't count towards the £85,000 VAT registration threshold.
Bear in mind that the £85k is over a rolling 12 months, rather than being aligned to your accounting/tax year. So anyone who is close needs to be monitoring it regularly throughout the year.
(Although I assume this doesn't apply to you - for completeness, where an unapproved garage takes their customers' vehicles to an approved test centre, but fails to meet the disbursement criteria above, the MOT charges would be subject to VAT and count towards the registration threshold.)
Re: Partial VAT business
xazy
As an aside
It's hopefully a minor issue but worth pointing out if you are close to vat threshold - any supply of services to your business from a non uk businesss is likely to be subject to reverse charge rules - example being if you pay for facebook adverts or google adverts and facebook/google are invoicing you from outsidee the uk (its almost certain that would be the case) - under reverse charge rules the value of these expenses MUST be added to your turnover calculation for vat registration purposes. Note from 1/1/2021 the rules are likely to change in this regard.
As an aside
It's hopefully a minor issue but worth pointing out if you are close to vat threshold - any supply of services to your business from a non uk businesss is likely to be subject to reverse charge rules - example being if you pay for facebook adverts or google adverts and facebook/google are invoicing you from outsidee the uk (its almost certain that would be the case) - under reverse charge rules the value of these expenses MUST be added to your turnover calculation for vat registration purposes. Note from 1/1/2021 the rules are likely to change in this regard.
