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My client is a garage unapproved for MoT tests. It has an arrangement with an approved MoT garage (an ‘approved centre’) which does the MoT test and charges my client a trade-discounted price of £40. This charge is exempt from VAT. My client then charges the customer £54 the statutory maximum for the test.
My client is reluctant to show a disbursement of £40 for the MoT test on the customer invoice plus a £14 additional charge.
However if it does not the disbursement rules suggest that the whole £54 is subject to VAT. This is not fair on the customer who then foregoes the VAT exemption that they would have had if they had gone to an approved centre and paid the full £54. It also strikes me as unfair competition.
Furthermore the individual customer...
