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Determining the correct VAT flat rate for vehicle painting and repairs
We act for a client who sprays second-hand vans and trucks. This amounts to about half of his work. He also repairs dents in similar vehicles which accounts for the rest of his work.
The VAT flat rate category for “other services” is 12% whereas that for repairing vehicles is 8.5%. Do Taxation readers have any opinions on our client’s circumstances and the appropriate rate to be used. We would also like to know how we can receive factual guidance without our client innocently selecting the incorrect percentage.
Query 18 540– Draft
Reply from Gardener
The choice of flat rate percentage is supposed to be made by the trader based on the sector “that most closely describes what your business will be doing in the coming year” (Notice 733 at paragraph.4.1).
The list of sectors in the regulations and the notice includes only one specific category...
