VAT accounting on commercial vehicles

[Howard Payne]

In general there is no VAT on used vehicles. The dealer pays "Margin VAT" on the profit he makes when he sells the vehicle. The only exceptions to this rule are commercial vehicles and hire vehicles which are eligible for VAT on the sale price and as such are the only used vehicles that attract VAT for the purchaser to pay and reclaim. The situation here is whether now the vehicle has been bought and sold "through" someone who hasn't paid and reclaimed the VAT - whether it is still eligible. I'm 90% sure it isn't and it should now be sold VAT exempt. HTH

[mark w]

Although not an accountant, I do run a vat registered bussiness. I am about to sell my current van once my new one arrives. My understanding is that because my bussiness is vat registered I have to charge vat on the sale of the van, as it is on the bussiness's books.
when I get my new van i will have to pay vat on it which i will claim back, my existing van will be advertised for sale at a price which will include the vat, i will issue a vat invoice that way if the purchaser is vat registered they can claim the vat element back.
Like I said not an account, but thats my understanding of the vat system.

[MCFastybloke]

As a Vat registered individual if i buy a van from a non vat man he cant charge it (reguardless of weather he paid it when he bought it).If i then sell it i must charge vat as i am registerd and reguardless of the purchasers vat status.This my understanding and is how i have applied it to my commercial vehicle purchases for the last 20 years i hope to god ive got it right!

[colinicky]

It is possiblethat everybody is correct :- If a buissness buys a van for buissness use & then sells it the vat is due on the entire sale but a motor trader who is buying purely as stock to resell without using the vehicle may come under a different scheme .
& if you sell a commercial vehicle to Poland the VAT man gets bugger all !

[chrisch]

Originally Posted by colinicky

..
& if you sell a commercial vehicle to Poland the VAT man gets bugger all !

Nope Poland is in the EU and the EU has VAT across all EU countries. Were you to sell it to Turkmenistan then the VAT is not applicable.

What a great tax. Half a dozen of us (me too) are VAT registered and don't know for sure....

Chris

[Ian@1904]

Originally Posted by chrisch

What a great tax. Half a dozen of us (me too) are VAT registered and don't know for sure....

Chris

and me a qualified beancounter not sure of the result either....
My current employr does not have a decent VAT guide either. So it is the VAT helpline tomorrow.

Thanks for the contributions everyone.

[kath2407]

Ona similar but differnt theme (thread hijack warning) can anyone point me to an idiots guide to VAT online.

I've just swapped jobs from working in Local Government to running bars and shops and I need to brush up on my VAT rules and theories.!!!

K XX

[Carlb]

I think that this is the HMRC guide that you need

http://customs.hmrc.gov.uk/channelsP...ent#P918_85624

If I read it correctly you need only pay VAT on the margin i.e. 7/47 x £1000

[Carlb]

@ Kath2407

I have found that it is usually just as easy to go the Revenue and Customs website and search for the relevant guide. As far as I can make out they are all available either as a webpage or in pdf format. The search engine is pretty good.

My experiences of the helpline have been woeful as I often know more about the subject than the person answering the phone.

[Howard Payne]

You don't pay VAT on the margin - the dealer does. If a vehicle falls out of VAT qualifying status - I'm pretty sure it can't "fall back in"