I still have think it depends on whether the intercom is classed as an integral part or a supplied accessory. To me visors etc classed as integral would be flip down tinted visor, likewise if the helmet comes with integrated Bluetooth then this would mean that any vat which the device would normally have would be exempt in the his situation as it is built into the helmet so an integral part.

To me an aftermarket device is not an integrated item rather it is an aftermarket item which you would be expected to pay VAT. I he shop say that hey would fit it for free to me is just good customer service.

Question to the OP, was the intercom the same brand as the helmet ?

this has stirred up more debate than I thought it would!

The intercom is a specific model to the helmet, you remove bits of the helmet and fit in it’s place, therefore integral.

revs1972 has it exactly as I’d see it. What I would have expected, had I knew about the zero rating of accessories at the time, would to be asked if it wanted fitting therefore saving the VAT, I would then expect to pay a reasonable amount for the fitting as then I save a little and the shop makes a little. but to offer to fit if for free and then deny the VAT saving feels a bit like they were trying it on, maybe they were, maybe they weren’t.

For example you could by a helmet and several visors along with an intercom system and pay no VAT if your interpretation is correct.

I don’t read it that way as it says fitted accessories, you can’t fit multiple visors to one helmet.

Ultimately the shop has made a cock-up. The invoice should show the both the helmet and intercom as zero-rated.

Remember the shop will not have paid VAT when buying the intercom but now has subsequently sold it with when there was no need. So the shop makes £43 for 5 minutes work, seems a bit shit tbh.

For an example, see this

https://www.motolegends.com/helmets/sena-10u-comms-system-for-klim-krios-helmets.html

Saving equates to the VAT on the product . Note it says when supplied with same brand helmet

Remember the shop will not have paid VAT when buying the intercom but now has subsequently sold it with when there was no need. So the shop makes £43 for 5 minutes work, seems a bit shit tbh.

I dont think theres anything to show thats what happened?

The shop probably/possibly bought them seperately therefore paid VAT on them. It would be wrong (iana tax accountant) to charge a zero rate.

E.g. food is zero rated. The factory would still pay vat to its suppliers of plastic packageing, machinery, and its energy supplier even though it combines them into a zero rated product. I presume they must get a refund on that vat assuming they dont make more on vat-able goods?

Hanlons Razor: Never attribute to malice that which is adequately explained by stupidity.

I interpret this a bit differently.

You bought a Helmet and an accessory and the shop offered to fit the accessory to the helmet for you before you left the shop.

Under the HMRC rules I think that VAT should have been paid as it wasn’t purchased as an integral part of the helmet

howeever if the shop had a “package” that included the helmet and accessory and offered them for sale as a complete unit then the overall “package” could be VAT free.

Suspect the shop is taking a strict view and trying to stay on the right side of the VAT man.

If you buy a solar panel installation for your home and purchase a power wall at the same time it’s all at 5% VAT, if you purchase the power wall afterwards it’s 20% vat.

Same rules as above. The OP shouldn’t have been charged VAT for the headset.

I dont think theres anything to show thats what happened?

The shop probably/possibly bought them seperately therefore paid VAT on them. It would be wrong (iana tax accountant) to charge a zero rate.

But as a retailer they wouldn’t have paid VAT when they bought the goods – VAT is applied at the time of sale. So they paid no VAT when they acquired the goods and then applied VAT incorrectly when they sold them. Who pockets the cash? I’m guessing not HMRC.

But as a retailer they wouldn’t have paid VAT when they bought the goods – VAT is applied at the time of sale.

They would have paid VAT to the wholesaler / distributor (assuming the supply was made in the UK and the seller was VAT registered).

They would have paid VAT to the wholesaler / distributor (assuming the supply was made in the UK and the seller was VAT registered).

No, they wouldn’t. VAT is applied once and only once and at the point of sale.

No, they wouldn’t. VAT is applied once and only once and at the point of sale.

How do you get input and output VAT then?

The wholesaler will have charged VAT, which the retailer will have paid.

Jeez… I thought Brexit was complex!

Personally I’d only push things a bit further with the shop if I don’t intend going there again. I do see your point though op.

No, they wouldn’t. VAT is applied once and only once and at the point of sale.

Dunno how it works in every business but wherever Ive worked its always been paid to suppliers, and charged to customers, then at the end of the accounting period you calculate the net and pay that to HMRC.

Otherwise at what point are you defining the ‘sale’?

Its value added tax. The clues in the name. You pay hmrc 20% tax on the value you added.

In relation to the original question: yes, it’s a pavlova.

When you go to McD’s do you ask for a VAT reduction when you buy takeaway rather than eat-in?

I expect if he had a £260 McDonald’s bill it would be feasible , but then again, that would be the least of his problems 😂

I read it as the headset is an accessory fitted by the shop for free so is vat payable

I just had a look on the website of the equivalent, in the Motorcycle world, to CRC/Wiggle. I put a Shoei helmet and a Shoei specific intercom in to my basket and there was no reduction in VAT. Granted it was not actually fitted but this leads me to believe that this scenario is open to interpretation.
If the retailer fitted a tinted visor at time of sale and left the originally supplied clear one in the box, should VAT be charged on the tinted visor?

When you go to McD’s do you ask for a VAT reduction when you buy takeaway rather than eat-in?

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Posted 8 hours ago

No because VAT is charged on takeaways and eat in .

No, they wouldn’t. VAT is applied once and only once and at the point of sale.

Totally wrong .

GlennQuagmire is very wrong. When I buy goods from the distributor they charge me vat, when I apply those good to my client I charge vat and give the difference to HMRC.

I read it as the headset is an accessory fitted by the shop for free so is vat payable

I’m with TJ on this one.

Wow, this is still going. Well played everyone.

My reading of the HMRC website, and running a VAT registered business myself, I would have expected not to pay VAT on the headset, but as people say it seems the shop interpreted it differently.

VAT IS paid to suppliers on VAT-able items and then charged on to customers with the mark up and returned to HMRC. On zero rated stuff at sale, the retailer applies for the refund from HMRC so doesn’t loose out. In my trade (construction) I often work new build which is zero rated, when I invoice I just rate it zero and don’t add any VAT, when I file my returns I then claim back all the VAT I’ve paid out as the difference between the figures, which is what the shop should also do IMO.

I’m not sure it’s as clear cut as that.
What’s to stop the shop buying 500 headsets and stating that every one was fitted by them so they claim the vat on every one regardless if whether it was fitted or not.

If this was a scam they didn’t actually need to fit your headset…. Just tell HMRC they did.
HMRC do not allow loopholes.

I think they did the right thing.
Anyway…. I expect you can/will claim the vat back yourself anyway seeing as you probably go to work in the bike sometimes!

GlennQuagmire is very wrong. When I buy goods from the distributor they charge me vat, when I apply those good to my client I charge vat and give the difference to HMRC.

Yep, looks like I am – I was passing on info I had been told but looks like that info is not correct.

Well, despite my earlier reservations, it appears that the zero rating can apply to certain accessories fitted at point of sale. My source is a Company Director of a Franchised Dealer that sells a lot of helmets with intercoms fitted.
Every day is a school day.

I think they did the right thing.
Anyway…. I expect you can/will claim the vat back yourself anyway seeing as you probably go to work in the bike sometimes!

I expect you’re wrong! Not everyone in the building industry are scumbag tax evaders and VAT fraudsters! I don’t claim for anything I don’t directly use for work. I don’t use my bike for work so don’t claim for it.

Go back to the shop and ask them to remove the intercom. Then it’ll all be square and you’ll be happy.

Did the headset come with a crown race?