Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie

Vat On Motor Vehicle Service

Options
  • 14-07-2024 7:12pm
    #1
    TitianGerm
    Registered Users Posts: 28,097 ✭✭✭✭


    I came across a confusing situation this weekend and I wanted to ask accountants who work in practice what their thoughts on this are as I've been in Financial Services for a while now so my day to day vat knowledge has dried up considerably.

    A friend of a friend was looking to set up a mechanics business and asked for a quick chat. I walked him through the usual, register for income tax, year ends, potential turnover and then registering for Vat based off his estimations.

    I had thought that the 2/3 rule would apply as he is providing a service and as such if the parts associated with a service made up 2/3 of the ex vat cost to the consumer then 23% should be applied to the whole invoice. If not then 23% to the parts and 13.5% to the labour element.

    However when I looked further into it I see that maintenance of vehicles is excluded from the 2/3 rule as seen here.

    https://www.revenue.ie/en/vat/vat-on-services/two-thirds-rule/index.aspx

    I then came across this section which had me thinking that the whole service should be chargeable at 13.5% except tyres, batteries etc

    https://www.revenue.ie/en/vat/vat-rates/search-vat-rates/M/motor-vehicles-repairs-certain-repair-and-related-services-.aspx

    However the word repair here threw me and had me leaning towards this section relating to repair of damaged vehicles rather than maintenance?

    What are your opinions on this or how do you normally deal with this in practice on a daily basis.



Advertisement