VAT 2/3rd's rule

kikel

Hey All,
I repair laptops, the revenue website states that this is a hardware so i will pay VAT at 13.5%. As part of the service i have to replace a hardware component on the motherboard. This component is 10% of the total chrge.


Do i charge VAT at 13.5% for the whole job job or must i charge 21% on the component. Am i covered by the following rule to charge 13.5% on the whole job?


18. "Two-thirds" rule: The new legislation has been drafted in terms of its provisions being subject to the two-thirds rule. Accordingly the two-thirds rule continues to operate, as heretofore, where supplies of services also involve supplies of goods. In practical terms, in accordance with section 10(8) of the Act, where a contract for the supply of services also involves the supply of goods (apart from food), the total consideration is deemed to be referable to the goods, where the VAT-exclusive cost of the goods exceeds two-thirds of the total contract price (excluding transport costs). In these circumstances the taxable person is liable to account for VAT on the total consideration at the rate applying to the goods.

Jakey

If the physical goods are cost 10% of the total charge, You charge 13.5% VAT on the whole job as the goods cost less than two thirds of the total charge.