VAT on used Motorhomes

[PhilMary]

I think vat is charged on used Motorhomes but did the vat go down from 20 to 5% last week?
Phil

 

[The Wino]

I think most dealers are vat registered but the vat element will only be on their profit on the sale. I could be wrong though. Of course anyone expecting a price reduction will be disappointed as the price will be decided on what the market will pay not some mathematical calculation.
I don't think there is actually a vat change on vehicles I thought it was just on hospitality.

 

[PhilMary]

I wasn't sure if it was the Hospitality industry as a whole or just hotels, campsites, holiday camps etc.
Phil

 

[The Wino]

I wasn't sure if it was the Hospitality industry as a whole or just hotels, campsites, holiday camps etc.
Phil

As I said though even if it is the whole industry on used oneseit won't make any difference I've never seen anyone advertise the vat element separately just the total price.

 

[PhilMary]

But it might give a bit of negotiation space.
Phil

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[eddie]

But it might give a bit of negotiation space.
Phil

There is no VAT on used motorhomes, unless the seller and the buyer are VAT Registered

So Van Bitz buys a motorhome, then sells it to a VAT registered business, then there is a VAT element, but the amount payable by Van Bitz to HMRC would be the same amount that buying business would claim.

 

[gus-lopez]

Hospitality industry as a whole

What has a 'motorhome' which is a vehicle ,to do with hospitality?

 

[pelican]

There is no VAT on used motorhomes, unless the seller and the buyer are VAT Registered

So Van Bitz buys a motorhome, then sells it to a VAT registered business, then there is a VAT element, but the amount payable by Van Bitz to HMRC would be the same amount that buying business would claim.

I think post 2 explains the situation where a Vat registered dealer sells a used motorhome.

 

[TheBig1]

all non commercial vehicles, and motorhomes despite being vans of a sort are non commercial, are sold without VAT and dealerships sell used vehicles and pay VAT on the margin scheme. So basically as a business they pay VAT on their profit from each sale

 

[PhilMary]

Ok, thanks all, it seems a bit clearer now.
Phil

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[eddie]

I think post 2 explains the situation where a Vat registered dealer sells a used motorhome.

Post two is wrong.

When my business buys a motorhome, we claim the VAT back

When we sell a motorcaravan we pay the VAT element

If we sell it to another VAT registered business, they can claim the VAT back, if they can justify the purchase as a business purchase.

The VAT element still exists if the sale is via a dealer.

 

[The Wino]

There is no VAT on used motorhomes, unless the seller and the buyer are VAT Registered

So Van Bitz buys a motorhome, then sells it to a VAT registered business, then there is a VAT element, but the amount payable by Van Bitz to HMRC would be the same amount that buying business would claim.

But that's not the usual situation I think most used motorhomers are bought from private owners trading in or selling up who aren't vat registered by dealers who are vat registered then sold to private buyers who aren't vat registered that's why I said what I did in post 2. Isn't that correct in that scenario?. Surely if the trader it vat registered they are liable to vat on the "value added" ie their margin and thats normally included in the price paid by the buyer the trader acts as an unpaid tax collector.

 

[eddie]

But it might give a bit of negotiation space.
Phil

There is no VAT on used motorhomes, unless the seller and the buyer are VAT Registered

So Van Bitz buys a motorhome, then sells it to a VAT registered business, then there is a VAT element, but the amount payable by Van Bitz to HMRC would be the same amount that buying business would claim.

But that's not the usual situation I think most used motorhomers are bought from private owners trading in or selling up who aren't vat registered by dealers who are vat registered then sold to private buyers who aren't vat registered that's why I said what I did in post 2. Isn't that correct in that scenario?. Surely if the trader it vat registered they are liable to vat on the "value added" ie their margin and thats normally included in the price paid by the buyer the trader acts as an unpaid tax collector.

I agree, it’s not the norm, and I answered the ‘bit of negotiation space’ post accordingly

Then I was quoted, and the post said, the question was answered in post two, which was yours and I said was incorrect.

The second a private buyer or unqualifying business buys a motorcaravan the VAT is lost, so at 5% or 20% VAT there is no extra ‘negotiation’

When I buy a motorcaravan, I pay VAT when I buy it, and legitimately claim the VAT back the end of the quarter. The VAT element stays live for want of a better analogy. Here is an example of a 2014 camper with a VAT element <Broken link removed>

If I bought it, I would be able to claim the VAT element back, as a qualifying business, but if I bought a van owned previously by a non qualifying business, or private Individual, i couldn‘t.

 

[The Wino]

I agree, it’s not the norm, and I answered the ‘bit of negotiation space’ post accordingly

Then I was quoted, and the post said, the question was answered in post two, which was yours and I said was incorrect.

The second a private buyer or unqualifying business buys a motorcaravan the VAT is lost, so at 5% or 20% VAT there is no extra ‘negotiation’

When I buy a motorcaravan, I pay VAT when I buy it, and legitimately claim the VAT back the end of the quarter. The VAT element stays live for want of a better analogy. Here is an example of a 2014 camper with a VAT element <Broken link removed>

If I bought it, I would be able to claim the VAT element back, as a qualifying business, but if I bought a van owned previously by a non qualifying business, or private Individual, i couldn‘t.

This is probably labouring the point! But that was the point of my post. Usually the vat on the MH is lost before the dealer aquires the MH as its from a non vat registered seller so the only vat element is the vat the dealer pays on their margin or are you saying that the dealer pays no vat on their margin?

 

[eddie]

so the only vat element is the vat the dealer pays on their margin or are you saying that the dealer pays no vat on their margin?

No your 100% right on the margin. The OP was under the misunderstanding that the change in VAT from 20% would give him leverage in negotiation.

I explained the circumstance were VAT is applicable on a Motorhome

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[The Wino]

No your 100% right on the margin. The OP was under the misunderstanding that the change in VAT from 20% would give him leverage in negotiation.

I explained the circumstance were VAT is applicable on a Motorhome

Just what I meant also buying is really just a negotiation if the seller thinks they can get a better price from someone else you can show them all the sums you like the price won't budge.

 

[Ukbandit]

I’ve really enjoyed wasting 10 minutes reading this thread.

 

[Cheshirecat57]

Bottom line, motorhomes wont be cheaper because of a reduction last week in vat On Burgers

 

[pelican]

Post two is wrong.

When my business buys a motorhome, we claim the VAT back

When we sell a motorcaravan we pay the VAT element

If we sell it to another VAT registered business, they can claim the VAT back, if they can justify the purchase as a business purchase.

The VAT element still exists if the sale is via a dealer.

I think you are missing the point here,We are talking about used motorhomes.
What you mention is common knowledge. The point raised by the OP can be a grey area.

 

[eddie]

I think you are missing the point here,

The point raised by the OP can be a grey area.

No grey area, the VAT rate will not affect the price. "Normally" VAT is not charged on used motorhomes, but there are circumstances where VAT is still applicable.

We are talking about used motorhomes.

Here is an example of a used motorhome with a VAT Element

<Broken link removed>

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[pelican]

As I understand the vat on a used motorhome sold by a vat registered company (as others have said) is payable when the dealer makes a profit (the difference in what he paid for it and what he sells it for.
I looked at your ad and assume that this vehicle was originally sold to a VAT registered company (who reclaimed the VAT) and who on sale of the vehicle will issue an invoice separately showing the vat content.
that will be paid by the purchaser. The purchaser may reclaim the VAT if they are VAT registered. and again issue at VAT invioce when they sell the vehicle. if it is sold to a non vat registered purchaser to vat is then locked in and never reclaimable.

 

[pelican]

Re grey area.
Dealer takes Van in px or purchases for stock from private individual.
pays £20k sell for £25k = £5k profit dealer pays vat on that profit or sells for £20K on paper so no vat to pay.

 

[Wilberforceftw]

Completely different scenarios on business to business and business to consumer. Ultimately when buying from a dealer who has taken in px you are purchasing you would have to know their purchase price for the vat to have any bearing on what you pay. Without that you have no clue what VAT is being charged so you can't use it as a bargaining tool.

 

[pelican]

Completely different scenarios on business to business and business to consumer. Ultimately when buying from a dealer who has taken in px you are purchasing you would have to know their purchase price for the vat to have any bearing on what you pay. Without that you have no clue what VAT is being charged so you can't use it as a bargaining tool.

aah that's a lightbulb moment for me.
When I bought our used van from a dealer he gave me 2 invoices 1 for 85% other the balance,Wonder why that was?

 

[Wilberforceftw]

aah that's a lightbulb moment for me.
When I bought our used van from a dealer he gave me 2 invoices 1 for 85% other the balance,Wonder why that was?

Could guess the reason but the norm if not being reported correctly (which is tax evasion) is to increase you px on the vehicle you purchase. That way the profit they make is artificially reduced so less VAT. This has happened to me on more than one occasion. It doesn't affect the customer in anyway as they pay the same.

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[pelican]

Could guess the reason but the norm if not being reported correctly (which is tax evasion) is to increase you px on the vehicle you purchase. That way the profit they make is artificially reduced so less VAT. This has happened to me on more than one occasion. It doesn't affect the customer in anyway as they pay the same.

Yes I must admit it made me smile along with a few bits that disappeared prior to collection.

 

[martin2603]

Used Commercials are Plus Vat, Motorhomes come under the Used Car Scheme, dealers only pay on the profit margin in the sale. It will not be shown on the invoie.

 

[eddie]

Used Commercials are Plus Vat, Motorhomes come under the Used Car Scheme, dealers only pay on the profit margin in the sale. It will not be shown on the invoie.

Again, normally, but isn't always the case. The link I posted with a VAT element is a good example

If a member of the public buys the motorhome the VAT element will disappear forever, If I bought it, we, Van Bitz would claim the VAT element that we had paid the dealer back, in the same way the dealer in turn would "pay" the VAT to HMRC

We ordered a new RV some time ago, which we purchased from the dealer, paying and claiming the VAT. Three years on, we sold the RV to another motorhome business which they kept for a while and sold it to a pop group, both interim sales and purchases paid and re-claimed the VAT element legitimately

We the ended up buying the RV back for our staff to use at motorhome shows, and paid and claimed the VAT back before finally selling the RV to a private individual. We paid the VAT on the sale price, and that was that, the VAT element had then gone for ever, even if a qualifying business subsequently bought it.

After that its just the VAT on the profit the dealers pay.

No grey areas and no "wriggle" room for purchasers even if the VAT reduction did apply to motorhomes, which of course it doesn't

 

[The Wino]

Used Commercials are Plus Vat, Motorhomes come under the Used Car Scheme, dealers only pay on the profit margin in the sale. It will not be shown on the invoie.

It might be interesting if it was itemised as it would effectively show the dealers margin

 

[Cheshirecat57]

It might be interesting if it was itemised as it would effectively show the dealers margin

99% correct, its the gross margin which is subtly but importantly different

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