How VAT Is Calculated on Workshop Jobs

VAT on workshop jobs is calculated at 20% for VATable items. Non-VATable items reduce the portion of the invoice that VAT is applied to.

Why This Matters
Understanding VAT calculation helps you:

• Avoid incorrect invoicing

• Ensure compliance with VAT rules

• Explain VAT amounts to customers

• Reduce credit notes and adjustments

Example
If the invoice total is £300 and includes a £50 MOT request line (VAT exempt), VAT is applied only to the remaining £250 of VATable items.

• VATable total: £250

• VAT at 20%: £50

• Invoice total: £300 (£250 + £50 VAT + £50 MOT)

Key Points

• VAT is only charged on items with a VATable code.

• Items marked as ZERO, EXEMPT, or OUTSIDE SCOPE will not have VAT applied.

• The VAT calculation is based on the sum of VATable lines, not the full invoice total.

To see common non VAT request lines see here: Common VAT Exempt Workshop Request Lines