2nd Hand MH & the dreaded VAT

Discussion in 'The Beginner' started by oldflemo, Feb 26, 2015.

  1. oldflemo

    oldflemo Funster

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    Look forward to your comments on this one and will not be offended at all!
    Am I being stupidly pedantic or just being a tight a----- Scot in not being prepared to pay for a second hand MH (2 years old) which has just been reduced from its new price by the VAT payable when new?After all the VAT does not represent any part of the vehicle simply the tax dear George Osborne wanted from the purchaser of it! I can understand that the sellers must be aggrieved that he has nothing to show for the VAT he paid.
    My way of thinking is that VAT is not payable on a second hand MH and being 2 years old there must also be depreciation to be taken off it's new cost.

    Thanks again Ian
     
  2. GJH

    GJH Funster Life Member

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    Depreciation on motorhomes is a strange beast and doesn't seem to follow any rules. There have been a number of threads on here mentioning that people had sold their vans for more than they paid some years beforehand.

    Probably the best guide for a particular van is to use Google and see what they are selling for generally.
     
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  3. greyman1

    greyman1 Read Only Funster

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    whichever way you want to look at it ,it is still a 20% saving of the ON THE ROAD cost of a new van !
     
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  4. WAG2CRU

    WAG2CRU Read Only Funster

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    I understand where you are coming from but, when ever I buy a new vehicle the on the road price paid in total by me is the price I paid for it, vat or no vat at the end of the day. If you are trying to work out what you are prepared to pay for a second hand van by deducting 20% for the vat and then an allowance for depreciation I think you are probably likely to be disappointed. Any second hand van or anything else for that matter is worth what the best buyer available is prepared to pay at the time, irrespective of what the total original price was. If you don't like the asking price make an offer, the seller can always say no!
     
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  5. Robert Clark

    Robert Clark Funster Life Member

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    If buying from a dealer then the screen price is the point at which negotiations begin....
    Dealers know that some buyers simply won't negotiate, so why offer them their best price.
    If I was buying second hand I'd take off the VAT and work back from there depending on age and condition
     
  6. emmitdb

    emmitdb Funster

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    I assume your prospective purchase is from a private seller (or is he a VAT Trader selling as a private seller?
     
  7. hilldweller

    hilldweller Funster Life Member

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    Of course it does, unless you are VAT registered.

    Here is a new van £50,000 to you. That's it. That is what you have to pay.

    Now 2 years on the dealer says the price is £40,000.
     
  8. oldflemo

    oldflemo Funster

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    What part does the VAT buy of the MH?
     
  9. hilldweller

    hilldweller Funster Life Member

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    You buy a new MH.

    You pay FIAT £9000
    You pay a converter £30000
    You Truma £2000
    You pay HMG £5000

    All you know is the total bill. The VAT part ensures that it is built to regulations, it ensures you can go there in safety to buy it, it enures you will be treated when you smash it up and stick your head through the window.
     
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  10. jockaneezer

    jockaneezer Funster

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    So what you're saying is, it's a used two year old van that costs 20% less than the price of a new van. So it's dropped a fifth of it's value in depreciation in those two years, if you think that's a fair price, take it from there.
     
  11. laird of Dunstan

    laird of Dunstan Funster Life Member

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    I agree with WAG,s comments , the vat thing is a bit of a myth,the dealer will have to send 20% of the purchase price to the taxman but to think that that instantly reduces the value of the item by 20% just does not happen.
     
  12. Robert Clark

    Robert Clark Funster Life Member

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    In simple terms it gets you nothing, it's simply a tax paid (and reclaimed) by manufacturers and paid but not reclaimed by consumers (you and me)
     
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  13. oldflemo

    oldflemo Funster

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    But why not he never paid any more than the cost of the MH he recovered 100% the VAT
     
  14. WAG2CRU

    WAG2CRU Read Only Funster

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    All of it unless you are vat registered and its for your business, the vat is simply part of the cost of purchase.
    I bet you would say your bacon roll cost £2.40 you wouldn't say it was £2,00 and forget the vat would you?
     
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  15. oldflemo

    oldflemo Funster

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    Not quite sure the relevance of a bacon roll however!
     
  16. WAG2CRU

    WAG2CRU Read Only Funster

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    What about the dealers 30% profit, that isn't reflected in the value of the motorhome is it, to be sure, best knock of 50% plus depreciation and start there!

    Good luck with that!
     
  17. fastpat

    fastpat Read Only Funster

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    No he didn't - he paid the difference between his input and output VAT to HMRC.
     
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  18. eddievanbitz

    eddievanbitz Trader - Funster

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    The dealers back caculate 16.666% of the new selling price of the retail price. This is paid the HMRC

    If the dealer buys a 2nd hand van for £10k and sells it for £14K The dealer pays the VAT element only on the £4k profit

    If Van Bitz buy the motorhome, we can claim the VAT element back from the HMRC

    When Van Bitz sells a motorhome, we too then have to pay 16.666% of the selling price to the HMRC
     
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  19. Robert Clark

    Robert Clark Funster Life Member

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    Just had a thought.....
    The dealer has to add VAT to the selling price of the second hand van too
     
  20. trekkin

    trekkin Read Only Funster

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    As I understand it VAT has to be paid on the vehicle at some point,

    So if a new vehicle VAT is paid,

    However if the vehicle is then, registered as a disable vehicle, or exported the VAT is reclaimed, or if it is reclaimed as it is purchased as an asset of a VAT registered company, then the VAT is due at resale,

    If the vehicle is imported not new then VAT is also due

    Not an expert but my understanding.
     
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