I have been employing a plumber to do some work in my bathroom, and recently received the invoice. This consists of a charge for the labour, plus a list of materials used for the job, which he is also charging me for. Each material has an amount listed at both pre and post VAT (UK sales tax).
What I am wondering, is whether the plumber will have to pay the government VAT on the entire amount received from me, or just on the amount paid for labour? For example, suppose the plumber buys some piping which costs £20 (inc. VAT) from his supplier. I then pay the plumber £20 in the invoice. Will the plumber then have to pay VAT on this amount received from me? Or does the plumber not have to pay VAT on this, because in effect it was already paid to the original supplier of the piping?