Yet another becoming a part time dealer thread.....
Discussion
fridaypassion said:
lol I think a call may be on order but I'm pretty sure the HMRC website would throw a warning up if you stuck a load of figures in reflecting trying to pay 300 quid VAT on a 10k T/O sale where margin was 2k as an example. ie T/O on that deal is 2k hence 2k sale and £333.33 VAT.....
If you cannot understand the difference between turnover and profit then maybe running a business isn't a good idea for you. You will get in a massive mess, alternatively speak to a qualified accountant and get them to sit down and explain things to you properly.fridaypassion said:
lol I think a call may be on order but I'm pretty sure the HMRC website would throw a warning up if you stuck a load of figures in reflecting trying to pay 300 quid VAT on a 10k T/O sale where margin was 2k as an example. ie T/O on that deal is 2k hence 2k sale and £333.33 VAT.....
Lol indeed.Margin VAT scheme as per a vat return:
Box 1 Vat on Sales as calculated by stock book using the margin scheme. * Plus any other output vat.
Box 4 Vat on Purchases (obviously does not include any vehicles bought - unless outside of the margin scheme)
Box 5 Net amount of 1 and 4
Box 6 The important part - TURNOVER (TOTAL sales net of vat)
Box 7 Total purchases net of VAT.
* For anyone who doesn't know the margin scheme. It basically allows you to pay 20% vat on the difference between the purchase price and selling price of a second hand vehicle (and selected other second hand goods).
This is partly to help iron out huge refunds that would be due under a normal scheme, if a dealer buys many more cars than they sell in a period and to stop huge vat payments becoming due, if a dealer sells many more cars than they buy in a period.
Turnover is the same whether using a margin scheme or not.
(From A.N. Accountant)
sanguinary said:
It basically allows you to pay 20% vat on the difference between the purchase price and selling price of a second hand vehicle (and selected other second hand goods).
Just clarify - you pay vat FROM the difference not ON the difference. If the difference is £200 then i will pay £33.33 FROM it, rather than pay £40 ON it.
t400ble said:
Thats all I do
Probably a few more that 4, but it's been free motoring in effect for me for years.
thats great 4400ble. Can I ask how you source your cars? auction/private. I was thinking of going to BCA Derby to have a look at prices. I did give them a call last week to see if they could send me a sale agreed price I could compare against the catalogue. All I wanted to know were prices being achieved on Vauxhall Insignias. I guess I will just get myself up there and invest the time on a recon mission. Does anyone know how you can find out achieved prices at auction, apart from actually sitting through the auction and noting each sale price down. For my first purchase I am looking at an Insignia for Cap price, driving it for a couple of months then selling it on the average private sale price.Probably a few more that 4, but it's been free motoring in effect for me for years.
legendtrader said:
t400ble said:
Thats all I do
Probably a few more that 4, but it's been free motoring in effect for me for years.
thats great 4400ble. Can I ask how you source your cars? auction/private. I was thinking of going to BCA Derby to have a look at prices. I did give them a call last week to see if they could send me a sale agreed price I could compare against the catalogue. All I wanted to know were prices being achieved on Vauxhall Insignias. I guess I will just get myself up there and invest the time on a recon mission. Does anyone know how you can find out achieved prices at auction, apart from actually sitting through the auction and noting each sale price down. For my first purchase I am looking at an Insignia for Cap price, driving it for a couple of months then selling it on the average private sale price.Probably a few more that 4, but it's been free motoring in effect for me for years.
Also, check out the fees for a private buyer as i heard they can add up to a lot with BCA (could be wrong) so you will need to factor that in.
Be v careful of insignia diesels. Very prone to floating flywheel problems which would kick your profit margin in to touch.
Also, be around to see it starting up from cold. You can tell a fair bit about a diesel by the way it starts up. Check if T/Belt is due / has been done. Watch for engine management lights on. Look for service history too.
Most people seem to go for / expect the SRI trim level, so be careful if you are buying a poverty spec one.
As there are so many about, resale prospects will be price driven, so aim to buy with a view to being able to price it as the cheapest on sale in your region (or extremely close to it). Price it mid point and the phone just wont ring.
Also dont rule out late model Vectras - they're as cheap as chips and theres still a home for them at the right price. I bought a lovely 2008 FVSH Vectra 1.8i with 70K miles on it at auction last year for £1700 + £100 fees. Put it on at £3295 and got it away. Bought another one for a similar price and it went too.
I had a fair bit of luck with cheapies from auction earlier in the year - though i stuck to quite narrow parameters -
6 months+ mot
petrol
saloon car or hatchback
no bodywork required
no engine management lights on
started easily and no rattles
good clutch
no known faults.
Most other people avoided stuff like that yet would end up paying two fortunes for ropey diesels.
Granted it took longer to sell them but when they went you were pretty much guaranteed never to see them again.
Edited by daemon on Friday 11th July 12:38
Zoon said:
fridaypassion said:
lol I think a call may be on order but I'm pretty sure the HMRC website would throw a warning up if you stuck a load of figures in reflecting trying to pay 300 quid VAT on a 10k T/O sale where margin was 2k as an example. ie T/O on that deal is 2k hence 2k sale and £333.33 VAT.....
If you cannot understand the difference between turnover and profit then maybe running a business isn't a good idea for you. You will get in a massive mess, alternatively speak to a qualified accountant and get them to sit down and explain things to you properly.t400ble said:
Thats all I do
Probably a few more that 4, but it's been free motoring in effect for me for years.
Out of interest how do you handle buyers who contact you with respect to you only having owned the car for 1 to 2 months. Do you say something like 'the wife says the car is too small and she wants an estate' or do you go down the route of I buy and sell cars for a hobby. Having bought a few cars myself I would want to know why someone is selling a car so quickly after buying it. I suppose at the <5k price bracket people are less worried and less likely to be spooked.Probably a few more that 4, but it's been free motoring in effect for me for years.
legendtrader said:
t400ble said:
Thats all I do
Probably a few more that 4, but it's been free motoring in effect for me for years.
Out of interest how do you handle buyers who contact you with respect to you only having owned the car for 1 to 2 months. Do you say something like 'the wife says the car is too small and she wants an estate' or do you go down the route of I buy and sell cars for a hobby. Having bought a few cars myself I would want to know why someone is selling a car so quickly after buying it. I suppose at the <5k price bracket people are less worried and less likely to be spooked.Probably a few more that 4, but it's been free motoring in effect for me for years.
daemon said:
Do you think fridaypassion will eat humble pie and admit hes wrong or will he just ignore the thread rather than be a man about it?
I think I've been to busy to check the thread it's our busiest time of the year at the moment. Will have a chat with the accountant asap. If it's wrong how we have been doing it he'll get replaced. Unusually for someone that posts on here I have no ego. If I'm wrong I'm wrong. Based on one of the posts above we might have paid to much VAT. Will clarify asap.legendtrader said:
thanks guys I have been well and truly put off now. lolol./ I am going to take a look at the auctions to by myself a good deal and then try and move it on after a couple of months. Probably best to just keep it as a hobby selling 3 or 4 cars per year on a personal basis.
Last auction I went to last week, I could buy cheaper from private ads in auto trader!legendtrader said:
Out of interest how do you handle buyers who contact you with respect to you only having owned the car for 1 to 2 months. Do you say something like 'the wife says the car is too small and she wants an estate' or do you go down the route of I buy and sell cars for a hobby. Having bought a few cars myself I would want to know why someone is selling a car so quickly after buying it. I suppose at the <5k price bracket people are less worried and less likely to be spooked.
Honestly never really been askedJust say i'm looking to buy something different, as I generally am
Bought a 2006 C3 1.4 HDI, 56k miles 6 weeks back. £1500. Lady in the pub was trading it in.
£2500 last week from the Auto Trader for it. Did service it, and valet it though.
Cheap motoring.
t400ble said:
'Traders'
How do you find auction prices?
Sometimes I cannot get my head round them
Missus would like a small car. Citroen C1 or something like that
Popped to SMA,'Birmingham' last week
2011 cars going for 3600, plus fees
Can buy one for a private person on auto trader for £3300!
Low mileage cars, or cars in demand such as the C1 you mention, are close are in excess of private sale prices now, with the added risk its got serious problems, service book missing, 1 key etc etcHow do you find auction prices?
Sometimes I cannot get my head round them
Missus would like a small car. Citroen C1 or something like that
Popped to SMA,'Birmingham' last week
2011 cars going for 3600, plus fees
Can buy one for a private person on auto trader for £3300!
fridaypassion said:
daemon said:
Do you think fridaypassion will eat humble pie and admit hes wrong or will he just ignore the thread rather than be a man about it?
I think I've been to busy to check the thread it's our busiest time of the year at the moment. Will have a chat with the accountant asap. If it's wrong how we have been doing it he'll get replaced. Unusually for someone that posts on here I have no ego. If I'm wrong I'm wrong. Based on one of the posts above we might have paid to much VAT. Will clarify asap.Hopefully its just been down to your interpretation of what he has said.
daemon said:
I dont think any auction house will give you the prices made for previous cars. I know any i use dont.
Also, check out the fees for a private buyer as i heard they can add up to a lot with BCA (could be wrong) so you will need to factor that in.
Data is available online,if you are registered with themAlso, check out the fees for a private buyer as i heard they can add up to a lot with BCA (could be wrong) so you will need to factor that in.
Being a private buyer at auction isn't good news. Yes, the fees are very expensive!
I registered as a trader buyer with SMA and Manheim, my two local ones.
t400ble said:
daemon said:
I dont think any auction house will give you the prices made for previous cars. I know any i use dont.
Also, check out the fees for a private buyer as i heard they can add up to a lot with BCA (could be wrong) so you will need to factor that in.
Data is available online,if you are registered with themAlso, check out the fees for a private buyer as i heard they can add up to a lot with BCA (could be wrong) so you will need to factor that in.
Being a private buyer at auction isn't good news. Yes, the fees are very expensive!
I registered as a trader buyer with SMA and Manheim, my two local ones.
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