VAT on Commercial Vehicles
Discussion
Quck question ,If someone or a company is not vat registered and buys a van new or second hand and pays vat on it then decides to sell obviously they can not claim the vat back . This means the revenue have financially gained .
If that commercial vehicle has been sold to some one or company like a van dealer who is vat registered should they be charging vat on the vehicle ?
Does the chain break once someone or a company does not claim the vat back ?
If that commercial vehicle has been sold to some one or company like a van dealer who is vat registered should they be charging vat on the vehicle ?
Does the chain break once someone or a company does not claim the vat back ?
Red Devil said:
Who is 'they'? Do you mean the seller? Have a look at the definition of
Taxable supply - Section 2.3
Registered person - Section 3.6
http://customs.hmrc.gov.uk/channelsPortalWebApp/ch...
If you did mean the seller, the answer is no. If not registered for VAT, that person cannot claim back any Input Tax, nor can they charge Output Tax on any sale, irrespective of what the item is. Charging Output Tax on a sale in such circumstances could get you into serious trouble. You could be accused of collusion with the dealer for the latter to fraudulently reduce their VAT liability.
The dealer selling the vehicle on can take advantage of the Margin Scheme.
Section 2.4 - http://customs.hmrc.gov.uk/channelsPortalWebApp/ch...
I am not vat registered so if I sell my van to a dealer or anyone vat registered should they sell the van with vat on it ? obviously the vat I paid on the vehicle is a loss .Taxable supply - Section 2.3
Registered person - Section 3.6
http://customs.hmrc.gov.uk/channelsPortalWebApp/ch...
If you did mean the seller, the answer is no. If not registered for VAT, that person cannot claim back any Input Tax, nor can they charge Output Tax on any sale, irrespective of what the item is. Charging Output Tax on a sale in such circumstances could get you into serious trouble. You could be accused of collusion with the dealer for the latter to fraudulently reduce their VAT liability.
The dealer selling the vehicle on can take advantage of the Margin Scheme.
Section 2.4 - http://customs.hmrc.gov.uk/channelsPortalWebApp/ch...
Upthejunction said:
You can't charge vat on something you haven't paid vat on.
You will see trucks advertised from traders some state that no extra vat is to be paid.
This is where they haven't paid it so can't charge
The reason I ask is because I enquired regarding a van ,the dealer is vat registered but the seller was not ,so I asked him the question why he is charging vat ,the answer was because "I am vat registered ".You will see trucks advertised from traders some state that no extra vat is to be paid.
This is where they haven't paid it so can't charge
Is this a bit of a scam ?
Pcot said:
No it doesn't.
If a VAT registered individual, or company buys a van with no VAT, and subsequently sells it again, he must charge VAT.
That means the tax man as gained ,seems unfair I can not claim the vat back I have paid , then they I sell it to a vat registered company then they sell it with vat !If a VAT registered individual, or company buys a van with no VAT, and subsequently sells it again, he must charge VAT.
Bloody hell that's greedy .
Pcot said:
No it doesn't.
If a VAT registered individual, or company buys a van with no VAT, and subsequently sells it again, he must charge VAT.
That means the tax man as gained ,seems unfair I can not claim the vat back I have paid , then they I sell it to a vat registered company then they sell it with vat !If a VAT registered individual, or company buys a van with no VAT, and subsequently sells it again, he must charge VAT.
Bloody hell that's greedy .
I would like to buy ether a new one or a couple of years old but I can not claim the vat back .
Even if I did earn enough to be vat registered my accountant bill would go up and I would be less competitive .
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