+ vat (1 Viewer)

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TomTee

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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.

Having seen the post above it's irrelevant if the 'van he's selling is an import or not. It applies to all used 'vans on which he makes a profit.

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hailman

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Lots, on and off, way back to VW splitty`s!
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.


I think the dealer PAYS VAT on his profit, he doesn`t charge Vat on top.


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`.


If all that is wrong I claim innocence on diminished responsibility. :)
 
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pappajohn

pappajohn

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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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A lot of business people buy RV's and somehow launder then the the company, and then they can claim back the Vat.

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Geo

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You may well be talking Castle Motors John??
 
T

TomTee

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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.

Nevertheless, that is the case. He can only charge VAT on the difference between what he paid for it and what he's selling it for. If however he buys a motor home from a trade source and pays the VAT (which he claims back anyway) he then has to charge VAT on the full amount.

But if it's bought from a normal customer, he can only charge VAT on his profit margin. I'm pretty sure that's the case but one of our dealer members will soon put us right I'm sure.

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T

TomTee

Deleted User
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.

VAT is not reclaimable on private cars, only vans if I remember correctly.
 

craiggs

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vat

you will pay vat on the full price if you are vat reg you can clame it back but if so when you sell you will charge vat

But i think you are not so you would pay the vat 17.5 % on price and when you sold it you would just sell for a price

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pappajohn

pappajohn

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i have found, on the net, that all caravans are subject to VAT, at a VAT registered dealers, regardless of how many previous owners which would point to the government collecting a large amount of cash on the same caravan over and over again.

possibly this dealer is classing a motorhome as a caravan...not a motorcaravan.

is that legal ?

wont be using them anyway.
 

Geo

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as the churchill bulldog would say " Ohhh Yes !"

whats the score Geo ?
Maybe he,s hoping you will add 17.5% to his asking price
You will need to monitor every deal hes offering and ask what the vat would be on any given RV
Heres the deal

If you buy and sell second-hand vehicles you might be able to account for the VAT by using the margin scheme, but only if there is no VAT shown on your purchase invoice. When you sell a vehicle under the margin scheme, instead of paying VAT on the full selling price, you work out the VAT due only on the difference between what you paid for the vehicle and what you sell it for - your 'margin'. There is no VAT for you to reclaim.
To be considered second-hand, a vehicle must actually have been driven for business or pleasure - it can't just have been registered and have delivery mileage.
You'll usually be able to use the scheme for used vehicles you buy from:
  • private individuals
  • dealers who aren't VAT-registered
  • VAT-registered businesses who were unable to recover any input tax
  • dealers who are VAT-registered but who sell you vehicles that are eligible under the margin scheme - their invoice shouldn’t show any VAT and must have a statement that identifies the supply as being within the margin scheme
You won't be able to use the scheme for a used vehicle where there is VAT shown on the invoice. If VAT is shown then you can reclaim this VAT in the normal way provided you meet all the rules for reclaiming VAT, but you'll have to account for VAT on the full selling price when you sell the vehicle
 

jhorsf

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Thanks Geo thats a lot clearer now:Doh::Confused:

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Peter JohnsCross MH

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The only time a used vehicle would be plus VAT if it has previously been used exclusively for business purposes eg a hire van.

When we sell off our hire vans we sell them at a VAT inclusive price unless it goes to another business user who wishes to reclaim the VAT again.

Vans exported would also be VAT exempt, new or used (we would not have to pay VAT on margin)

Peter
 
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pappajohn

pappajohn

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Thanks Geo thats a lot clearer now:Doh::Confused:

thats what i thought.....wish i'd never asked now :ROFLMAO:


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 ????
 

Peter JohnsCross MH

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Oh most definately and I bet the blood suckers at HMRC would be MOST INTERESTED!

Peter

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Geo

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It would appear so:RollEyes:
he wont get any recomendation from me after letting me set off on a 200 mile trip to view
after getting an asurance no other views had or were taking place, he let me get 60 miles from his place before calling saying it was sold
I think I asked too many questions and that was payback:winky:
Geo
 
T

TomTee

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thats what i thought.....wish i'd never asked now :ROFLMAO:


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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pappajohn

pappajohn

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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.

not saying he is cooking the books (how could i know if i didnt buy from him and work out the figures) but why make the price unattractive to start with by saying "+VAT" instead of stating an actual VAT figure "+££££ VAT" or even an inclusive price on the screen.

to my mind it is totally wrong anyway as the vat has been paid already by the original purchaser and each subsequent 'inc VAT' sale is lining the govs coffers over and over again.

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All new cars sold include VAT (unless disabled).
We sell motor vehicles and if we buy from a private seller who has not charged us VAT then we only have to pay VAT on the profit we make. If VAT is charged on the price when we purchase the vehicle then we have to pay VAT on the total price we sell for.
The VAT is usually incorporated into the selling price so you would not necessarily be aware of this unless you are given a VAT invoice, which of course you should. All VAT has to be passed onto HMRC.
Below is the official HMRC stance on this - including campervans.


Selling new vehicles
As a motor dealer you'll normally account for VAT at the standard rate when you sell a new vehicle to a customer.

Selling used vehicles - using the Margin Scheme
You may be able to use the Margin Scheme for second-hand goods to account for the VAT when you sell used vehicles, but you can’t use the scheme for vehicles where there is any VAT shown on the purchase invoice. Under the scheme, when you sell the vehicle, instead of paying VAT on the full selling price, you work out the VAT due only on your 'margin'. This is the difference between what you bought the vehicle for and what you sell it for.
You won't be able to use the scheme:
· For new vehicles.
· For vehicles that have been registered and only have delivery mileage. These count as new vehicles.
· If your purchase invoice for the car shows any VAT.
· For new or used vehicles that you import from outside the EU.
· For new or used vehicles you buy from a business in another EU country on an invoice which does not show the Margin Scheme declaration for that country.
· If you can't meet all of the Margin Scheme requirements - including record-keeping. You'll have to charge VAT on the full sale price of the vehicle instead.
Whenever you sell a vehicle under the Margin Scheme you must give your customer a sales invoice that follows the special rules for Margin Scheme invoices - whether they're VAT-registered or not.


Buying second-hand vehicles
If you buy and sell second-hand vehicles you might be able to account for the VAT by using the margin scheme, but only if there is no VAT shown on your purchase invoice. When you sell a vehicle under the margin scheme, instead of paying VAT on the full selling price, you work out the VAT due only on the difference between what you paid for the vehicle and what you sell it for - your 'margin'. There is no VAT for you to reclaim.
To be considered second-hand, a vehicle must actually have been driven for business or pleasure - it can't just have been registered and have delivery mileage.
You'll usually be able to use the scheme for used vehicles you buy from:
· private individuals
· dealers who aren't VAT-registered
· VAT-registered businesses who were unable to recover any input tax
· dealers who are VAT-registered but who sell you vehicles that are eligible under the margin scheme - their invoice shouldn’t show any VAT and must have a statement that identifies the supply as being within the margin scheme
You won't be able to use the scheme for a used vehicle where there is VAT shown on the invoice. If VAT is shown then you can reclaim this VAT in the normal way provided you meet all the rules for reclaiming VAT, but you'll have to account for VAT on the full selling price when you sell the vehicle.
The margin scheme also covers commercial vehicles.


Commercial vehicles
VAT-registered businesses can generally reclaim the VAT when they buy a commercial vehicle. Any vehicle is a commercial vehicle if it has a payload of one tonne or more, or an unladen weight of three tonnes.

Motor homes and motor caravans
Motor homes and motor caravans aren't considered to be cars for VAT purposes so long as certain features have been incorporated into the vehicle. These are:
· a permanently installed sink and cooking facilities
· seating arrangements so that diners can sit at the meal table
· at least one bed which has a minimum length of 1.82 metres
· a permanently installed fresh water tank with a minimum capacity of ten litres
 

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