Motorhome VAT QUALIFYING VEHICLE???? (1 Viewer)

[955matt]

What makes some second hand Motorhomes VAT Qualifying and some not?.

Just looking at vans and 2 have said they are plus VAT why?

Thanks Matt

 

[Weinsbergaman]

Probably because they were bought by a business which claimed the VAT back. Maybe ex hire vehicles.

Cheers Antony

 

[955matt]

Thanks Antony, that was my suspicion too

 

[Abacist]

Firstly the vendor has to be VAT registered to be able to charge VAT.

Most dealers sell using the HMRC secondhand margin scheme which means that the dealer only has to charge VAT on his profit margin and as most customers are not VAT registered the VAT is never shown or disclosed other than to HMRC. There is also no input VAT for him to reclaim when you or I trade our vans in for a new one.

Sometimes a van will come in from a VAT registered trader who will charge the dealer VAT who then may decide to sell it as plus VAT e.g. Hire or leased vans.

 

[trekkin]

Probably because they were bought by a business which claimed the VAT back. Maybe ex hire vehicles.

Cheers Antony

Or also may be purchased by registered disabled driver,

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[955matt]

Both vans are top end vans £100k plus, so I would think they have been bought through a company to get the vat back

Matt

 

[DBK]

Both vans are top end vans £100k plus, so I would think they have been bought through a company to get the vat back

Matt

Remember they have to charge VAT to the purchaser, irrespective of whether they are VAT registered or not. Only VAT registered purchasers can then in turn claim it back, assuming they are using the vehicle for business. Which might be no more than going to the odd exhibition and selling a few tea towels! Up to the VAT Inspector what you can get away with.

 

[Popeye]

There are several correct replies to this thread but for greater clarification there only two ways VAT can be charged on vehicles. Dependent on how it is charged and either reclaimed or not decides whether a vehicle is a "Margin" vehicle or a "Qualifying" vehicle.

So if a new vehicle is sold to a rental company who claim back the VAT on the original purchase price then they have to charge VAT at disposal regardless of whether the purchaser is VAT registered or not.

For this reason any vehicle that remains a "Qualifying" vehicle can only have been owned and used for business purposes and the only purpose I can think of is "Rental".

Once a vehicle has been owned by a non-VAT registered business or person it becomes a "Margin" vehicle and it can never become a "Qualifying" vehicle again.

 

[funflair]

There are several correct replies to this thread but for greater clarification there only two ways VAT can be charged on vehicles. Dependent on how it is charged and either reclaimed or not decides whether a vehicle is a "Margin" vehicle or a "Qualifying" vehicle.

So if a new vehicle is sold to a rental company who claim back the VAT on the original purchase price then they have to charge VAT at disposal regardless of whether the purchaser is VAT registered or not.

For this reason any vehicle that remains a "Qualifying" vehicle can only have been owned and used for business purposes and the only purpose I can think of is "Rental".

Once a vehicle has been owned by a non-VAT registered business or person it becomes a "Margin" vehicle and it can never become a "Qualifying" vehicle again.

I think you will find plenty of businesses that own a motorhome that do not use them for rental, accommodation for exhibitions and shows in connection with their business for example.

 

[Popeye]

I think you will find plenty of businesses that own a motorhome that do not use them for rental, accommodation for exhibitions and shows in connection with their business for example.

You are quite right, and provided they use them for NOTHING but business use they are quite within their rights to own it NET of VAT, and this will later be up for sale as a Qualifying albeit 2nd hand vehicle, which can be sold on to another VAT registered user who can keep it as a "Qualifying" vehicle, but the instant it becomes a Margin vehicle there is no way of reclaiming VAT or indeed returning to "Qualifying" vehicle status.

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[funflair]

You are quite right, and provided they use them for NOTHING but business use they are quite within their rights to own it NET of VAT, and this will later be up for sale as a Qualifying albeit 2nd hand vehicle, which can be sold on to another VAT registered user who can keep it as a "Qualifying" vehicle, but the instant it becomes a Margin vehicle there is no way of reclaiming VAT or indeed returning to "Qualifying" vehicle status.

I cant imagine anybody would use a business asset for anything other than business.

 

[GWAYGWAY]

If the dealer was not using the margin system then he might charge the full amount on the total price???? The sale of a pickup or delivery van almost brings the VAT on to the price even if it was not a VAT seller.. The dealer might be charging VAT and not declaring the full amount only the margin one on his books, illegal but profitable.

 

[Abacist]

This raises the interesting point of the private use of business assets. There are two aspects: VAT and Income Tax. Income tax is covered by an assessment of benefits in kind provided to directors or employees or in the case of a sole trader or partnership of a private use adjustment. Believe me that HMRC are quite switched on to requiring and inspecting logs of the use of such assets used by private purposes and will require evidence of business use such as attendance at shows, sitting idle in the office yard, mileage records etc. To be legitimate business use by an employee or director it has to be wholly, exclusively and necessarily for business purposes and for sole traders and partners it has to be wholly and exclusively for business purposes. Clearly any private use is a supply by the business to the individual for VAT purposes and thus a VAT liability is incurred on the deemed supply.

 

[Abacist]

If the dealer was not using the margin system then he might charge the full amount on the total price???? The sale of a pickup or delivery van almost brings the VAT on to the price even if it was not a VAT seller.. The dealer might be charging VAT and not declaring the full amount only the margin one on his books, illegal but profitable.

They do check transactions between businesses on a test basis and a full VAT invoice used to reclaim input VAT on one side and a margin declaration of VAT on the same transaction in the vendors books would be fraudulent and if caught anything but profitable if it resulted in a prison sentence.

 

[Popeye]

I cant imagine anybody would use a business asset for anything other than business.

Well then if and when we meet I'll tell you of many who've tried some of whom have succeeded and even more who failed and fallen foul!

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