Thinking of buying ...

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Karci

If you are registered for VAT, as my empoyer is, you have to collect VAT on ALL sales, new or secondhand. This is why trade in prices for cars are less than private sales.

Ian

2002 1.4 Petrol SE, silver with climate control.
Why are all the A2s in Lichfield are silver ? ? ?
 
Almost right on the VAT. Most UK Dealers pay VAT using the margin scheme (profit) for cars. E.g. they pay VAT on the difference between what they sell the car minus what they bought it in for less any items that Customs & Excise allow to prepare the car for sale.

If you're a business (but not a delear/trader) then you pay VAT (and cannot reclaim) on all new vehicles. For new vans you can reclaim the VAT against your VAT outputs. Second hand cars do not attract VAT.

Dave

1.6SE
 
Quite right Dave. Vans you can, cars you can't!

That's why I have never understood why dealers advertise some cars (ostly large executive saloons) as "VAT qualifying". What does that mean?

I haven't heard of the margin scheme, but it stands to reason. VAT is after all a tax on your profits if you are VAT registered and can reclaim your input VAT.
 
Good point Karcsi, You often see the expression VAT Qualifying on some very expensive cars inmain dealer adverts, e.g. Audi Avants, and Merc Estates etc.

In the past I was aware that certain VAT collections had 'local' rules on what they classed as a 'van' or totally business only vehicle. So a certain area would allow LandRover Freelanders etc...

In theory if you can prove that a car is totally for business use only then you could claim the VAT back - just try proving it. For vehicles classed as 'vans' the C&E were less rigourous on private use of such a vehicle (as there was no perk value attached).

I'd like to hear from someone in business who's claimed back VAT on a car. Always looked a but dogy to me !

One other thing. If by chance a business does manage to buy a car and claim the VAT back, then when it sells it on it must also charge VAT on sale. Perhaps this is where the expression comes from.

Dave

1.6SE
 
I was on the right track. Found the following on a dealer website...
quote: SPECIAL NOTICE TO BUSINESS USERS REGISTERED FOR VAT ONLY.

The majority of our vehicles are VAT qualifying vehicles, which means when the vehicle was purchased new the VAT was reclaimed by the purchaser. Subsequently, if you require the vehicle for business use only and you are registered for VAT, please contact us for full details of our VAT reclamation scheme. This does not affect the list price for normal purchasing.
Click to expand...


Dave

1.6SE
 
Found out that the SEAT dealer who took the A2 in part-ex for £9600 is showing it on the forcourt for £10999. Not as much as I expected and a good bargain for someone.

Steve - 2002 1.4SE petrol, Silver, black/black interior, Then an identical replacement 2003 A2. Now a Toyota Corolla 1.6 T-Spirit
 
Top tip, if you use your car for all your daily business, you can claim the VAT back, this is difficult to prove in some cases, but if you stick a massive company logo on it you can tyhen claim the VAT back. If you lease a car you can claim 50% of the vat back for your companies use.

A2 1.6fsi sport climate cd amulet red
 
A couple of years ago I heard of a guy who was allowed to charge his Lamborghini against profits as a business expensive becausehe successfully proved that its use in the business had substantially increased his income.

His business was to deliver cigarettes to nightclubs in order to fill the machines. Since he had switched from his normal van to the Lambo, his sales had rocketted due to the impression given when such a flash car turned up at a nightclub only to fill the cigarette machines.
 
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