Non VAT Registered Garage

victor2

Horizon81 wrote: »

The garage pay £120 for the part (£100 + £20 VAT) but claim the £20 back so it's essentially a mark up/profit for them. They sell the part to the customer for £120 + VAT (£144).

In Vaios example above he was making out like the garage charges the customer £100 + VAT (£120) for the part.

Depends how the garage do their accounting. If they effectively ignore the VAT they pay on parts, as they'll claim it back, then they are getting them for £100, but may not pass that on to the customer. The unregistered guy pays £120 and will pass that on to the customer, but doesn't add VAT on to it again, and doesn't add it to his labour bill.
The unregistered guy always works out cheaper where his own labour is concerned, assuming his labour rates are similar to the dealer - and they're usually less.