MOT test fees

In the case of Ellon Car Clinic Limited v HMRC, the taxpayer operated as a car repair and servicing garage.  In doing so the company carried out MOT work by using the services of a third party approved MOT test centre. Customers were invoiced as if the taxpayer was an authorised MOT garage, i.e. the MOT charge was not disclosed as a separate amount on the sales invoice. All customers were aware that the company was not an authorised garage during the relevant period and that the MOT testing was physically undertaken by a third party.


The Tribunal Judge ruled in favour of the taxpayer and confirmed that as it was clearly acting as an agent, even though its invoice did not separately show the amount that was paid to the third party test centre, the actual fee paid for the MOT test was not subject to VAT.


If you or your clients operate a car repair and servicing garage and sub-contract out MOT testing, please call our free helpline to discuss your VAT position.

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