pappajohn
LIFE MEMBER
never noticed before but is it usual to pay VAT on a used motorhome from a dealer ????
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Yes, but only on his profit margin. If he makes £5000 profit he has to charge VAT on that amount. It's the same with most second-hand goods if the dealer is VAT registered.
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You may well be talking Castle Motors John??
this was on a used RV at a dealers priced at £18,750 +VAT....all their stock is +VAT
there'll be a big difference between VAT on £18,750 and VAT on his profit only.
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I think the dealer PAYS VAT on his profit, he doesn`t charge Vat on top.
That is not the case. He charges VAT on his profit, which the customer pays. There is no input VAT so the dealer does have to pay the entire amount, but the customer has paid him. If he buys a 'van for £15K and wants to make £4K profit he will sell it for £19K plus the VAT on the £4K.
I also think it might make a difference if he is selling to a company that is VAT registered, as some vehicles are described as `VAT qualifying`, which means the company purchasing the vehicle can reclaim the VAT, I think, so the vehicle could be advertised `plus VAT`.
A company can only claim back the VAT if the item being bought is for business use. A businessman cannot use his firm to buy a motorhome so he can claim back the VAT.
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Maybe he,s hoping you will add 17.5% to his asking priceas the churchill bulldog would say " Ohhh Yes !"
whats the score Geo ?
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Thanks Geo thats a lot clearer nowoh::Confused:
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thats what i thought.....wish i'd never asked now
so basicly Geo, you need to ask what the VAT is being charged on...the full price or his profit margin.
all his stock wont have come from a VAT registered seller so if he's charging VAT on the full price he's pulling a fast one ????
What's the point of him charging more VAT than he has to? He has to pass on every penny of VAT that he receives to the Revenue and Customs so why would he make his prices more unattractive than they need be?
The VAT he charges must be on his invoice and if he then pays the Revenue less by claiming that he charged less he is on very dangerous and criminal ground. Traders are subject to regular and searching VAT inspections.
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