I have no idea what are you trying to show. If a) the customer pays 100+tax for the repair (which includes in this very simplified model 50+tax for the suppli

I have no idea what are you trying to show. If a) the customer pays 100+tax for the repair (which includes in this very simplified model 50+tax for the supplies and 50+tax for the value added by the repair shop) and b) the tax goes from 21% to 66% then c) the customer will pay 166 for the repair instead of 121. That's what I said in https://news.ycombinator.com/item?id=26967392 https://news.ycombinator.com/item?id=26967392 I don't see how "work will be relatively cheaper". The VAT applies to everything. (It's also confusing that you say that the benefit is used to pay the salaries, by the way. And if what you call "benefit" is used entirely to pay the salary then no corporate tax will be paid because the company will be losing money.)