Car dealership overcharging me tax?

jaseBase

A Jeep dealership in Oxford purchased an ECU for my car from the US via ebay (with my permission .. if was a cost/affordability thing). The invoice for ebay included 1) cost for part 2) delivery charges and 3) import tax. The dealership paid for the ebay purchase and subsequently fitted it to my car. I've now been invoiced from the dealership and they have added VAT (20%) on top of the original ebay invoice price (along with the labour etc). Is this correct?

I question because the garage offered me the option to supply the part myself and provide it to them. If I'd have bought the same part from ebay and given it to them. I would not have paid the additional 20%.

Thanks, in advance.

molerat

The garage are correct, all parts and services they supply must have VAT added. The only way you would have avoided paying VAT importing it yourself would have been if you were very lucky and it slipped through the customs check. I assume this was a relatively expensive item so little chance of that happening.

jaseBase

thanks molerat .. always good to check these things out if unsure. really appreciate the speedy response.

gollum007

molerat wrote: »

The garage are correct, all parts and services they supply must have VAT added. The only way you would have avoided paying VAT importing it yourself would have been if you were very lucky and it slipped through the customs check. I assume this was a relatively expensive item so little chance of that happening.

I'm not quite sure you're right, it really depends on exactly what's on the paperwork.

From the OP, it looks to me as if the eBay purchase was through the GSP.
They produce a 'total' figure to be paid, which includes both import tax and VAT.

Logically therefore, the car dealership (as a VAT registered business) should be able to reclaim the VAT element of this figure as input VAT, before re-charging the customer their own output VAT.
At the minute, it seems to me that the VAT has been 'double-dipped', by the VAT being charged first by eBay on the import, and then again by the dealer


However, this really depends on exactly how the import was structured, and exactly what tax figures were paid to whom, and how they're declared; I've never personally used GSP either, so I don't know if they've done something funny that prevents the garage from submitting an input VAT claim....


I could be barking up the wrong tree here, but we'd need to see the eBay listing / invoice for the part, and a breakdown of what the garage actually charged to be sure of what's going on.

TheCyclingProgrammer

Even if the garage could reclaim the VAT on their purchase, they aren't obliged to pass on the cost at net + VAT, they can charge what they like for the supply of the part (+ VAT of course).

gollum007

TheCyclingProgrammer wrote: »

Even if the garage could reclaim the VAT on their purchase, they aren't obliged to pass on the cost at net + VAT, they can charge what they like for the supply of the part (+ VAT of course).

That's true, good point

I would like to think they wouldn't do that mind.....

jaseBase

Thanks for all the replies. Here's some extra detail - if it helps bring clarity.

Ebay listing: [sorry - new user - can't post links]

Search: "05150523AA" (which is the part number) and it's being sold by "fs1inc" currently priced at $164.99

Here's a copy of the invoice: [again .. sorry - new user - can't post links]

Part: 05150523AA, List: £178.54, Qty: 1, Value: £178.54
Install and test PCM, Value £99 (this is the labour charge)
Requirement sub-total: £277.54
Tax total: £55.51
Invoice total: £333.05
(tax type: standard, rate: 20%)

I have not seen the ebay invoice to the dealership, but assume they've re-invoiced me the same amount as per the ebay purchase (including delivery / import tax etc), based on the fact that if I follow the ebay link and 'add to basket' I get the same £ amount purchase price as per invoice (allowing for slight exchange rate variances, the part was ordered 3 weeks ago).

For context, I have other issues with the service I received from the dealership. This may only be a £35 quibble - but it forms part of a larger dispute, hence the request here for clarity.

Thanks again.

00ec25

You are going round in circles.

You contracted with the garage for the sourcing and fitting of a part. The garage has come up with a price for that work and must charge VAT on top of that price.

how much the part cost the garage to buy is irrelevant since they are free to apply any level of mark up they want to the "cost" price

the fact the garage recovered the VAT is irrelevant as they were not contracted to supply the part to you at cost. Had you bought it yourself you would have incurred the import VAT anyway, although as you now realise had you then given the part to the garage they would not have needed to bill you for its purchase cost so you would not now be facing the fact VAT must be charged on the price they have decided to charge you for the part.