Legal Article - VAT

VOSA MOT Test Fees

Approved test centre

MOT test fees are not VATable (‘Outside the Scope’) provided the charge does not exceed the statutory maximum.

Unapproved garage

(i) receipt of discounts by approved test centre

A discount given by a test centre is treated as a normal trade discount for VAT purposes. There is no VAT liability on the discounts received.

(ii) recharge of MOT’s to customers

• With profit
Any amount charged over and above the MOT test fee is VATable at 17.5%

• Without profit
Subject to the disbursement conditions, (contact Lawgistics if you are not sure) if you show the exact amount charged by the test centre separately on the invoice to your customer, it is free of VAT.

Motor Dealers

Please note when selling a used car you cannot itemise Mot test fees on your sales invoices in an attempt to reduce your VAT liability.

Customs have clamped down considerably on this practice and therefore dealers who itemise MOT test fees on their invoices when selling cars are liable to an assessment by Customs & Excise.
N.B This rule is entirely different to the sale of road tax which we cover later.

Published: 21 Mar 2011


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