VAT in a van conversion (1 Viewer)

[Otter Spotter]

On a recent Utube vid messaging there is a guy who is insisting that if you convert a Van to a Campervan you have to declare it to the Vat man and pay vat on it ! My argument is that you don’t because the cost of conversion, mainly the components and board etc will all have been charged VAT when purchased and labour too if done professionally. Therefore if you had to declare it to the VATman and pay VAT on the increased perceived value, it would effectively be double vat paid.

Whats the collective thoughts on this ?

 

[Odd job]

Vans do have to have VAT paid on purchase, a buyer who is VAT registered can claim it back but would have to charge it on resale. So only if the converter bought it as a van reclaimed the VAT and converted it when it was sold, the same as anything else, it would have to have VAT paid on it.
That is how I see it but it's many years since I was VAT registered so don't take it as gospel.

 

[Lenny HB]

Same as yours another youtube wally.

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[Mikeco]

For most people VAT will have already been paid on the van purchase and materials you use to convert it. It may be different though if you are a VAT registered company.

 

[Lenny HB]

Boring tonight, instant food apart from the beans.

Did finish off with fresh Mango and Fromage Blanc.

 

[Tombola]

The confusion comes in that it can depend if itnis eligible for the vat on margin scheme.

In theory you will claim back all the vat you have paid for the goods to convert so then any profit made after this conversion the vat man may want their chunk of.

Similar I suppose to if a clothing business buys say a tee shirt...for 1.00 they pay vat on it and claim it back after they could sell it for 2.00 and give him his chunk.

but they then add embrodieries or logos to the tee shirt. They claim vat back on the embrodiery materials
.then ultimately the garmet is sold.for 3.00

The vat man wants 20% of the 3.00 not the 2.00 and you claim your vat back on the original.product and the vat for the materials for the conversion.

"In theory" and of course only if you are vat registered.

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[The Wino]

As others have said I think vat on the increased value is only for vat registered professional converters

 

[Odd job]

There may be some confusion because way back in the day there was an extra tax on a car purchase which was not paid on a van, but if at a later date you put windows in the van then the tax had to be paid. It was nothing to do with VAT and the car tax went years ago

 

[peterc10]

On a recent Utube vid messaging there is a guy who is insisting that if you convert a Van to a Campervan you have to declare it to the Vat man and pay vat on it ! My argument is that you don’t because the cost of conversion, mainly the components and board etc will all have been charged VAT when purchased and labour too if done professionally. Therefore if you had to declare it to the VATman and pay VAT on the increased perceived value, it would effectively be double vat paid.

Whats the collective thoughts on this ?

My view is that he is talking through an orifice which is not his mouth ............

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[Otter Spotter]

My view is that he is talking through an orifice which is not his mouth ............

Agreed

 

[Tombola]

Its true Im afraid, if they are a vat registered business, they have to give the vat man the vat they collect and the profit they make.

It isn't his vat, its the vat mans from the customer.

Just as if he claimed the vat back from the supplies purchased to increase the value of the van. It isnt the supplier that loses out its the customer buying the van.
you are just a glorifed vat collector Im afarid.

sad but true
obviously if no vat is added (if the buisness isnt vat reg) then nothing to claim or nothing to give back.

And considering we are talking camper vans/motorhomes, I cant see many being under the 85k limit for registering for vat.

but we wont talk about that

 

[Trevor Wbm]

It's already been said, but to be clear the only people who have deal with VAT are companies, or traders, that are registered, that being voluntary under an £85k turnover (nb: not profit) threshold, mandatory above it. Once VAT registered, you can claim back the VAT on your supplies, assuming they attract VAT in the first place, but then you have have to pay 20% on the sale price of the finished product.
If you're not VAT registered there isn't any way you can pay the VAT.

An individual converting one second hand van for resale would I think stay well under the threshold. Anyone doing two or three a year might well find themselves having to register if they want to be legit. Being registered is probably an advantage if your business buys in a lot of product for resale, not so much if you are providing mostly labour.

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[martin2603]

It used to be the case that when vans are sold without side windows as commercial vehicles the buyer could reclaim all the VAT back . You might remember the first Range Rovers could be bought without side windows, hence reclaimable VAT. However, once the VAT on the original purchase has been paid and the conversion completed the seller would only pay on the margin if he was VAT Reg. I would think that it is only a matter of changing the category of vehicle for the V5.