Motability and VAT
Discussion
A mate worked for a while in a caravan/motorhome dealers.
Had customers come in to buy a motorhome. Deal done then they produce motability paperwork to get the VAT taken off.
He later queried the situation with another mate who confirmed the VAT matter.he went on to describe someone selling on such a motorhome without declaring the VAT issue to someone not on motability. The new owner would be chased for the VAT. The dealer contacted HMRC and they pursued the original buyer for the VAT.
It seems this is a potential scam and abuse of motability.
My mate was also a rep for a chandlery company and similar motability deals can be had for boats.
Huge discount over a non motability buyer and a watch point for subsequent buyers.
Motability is a great thing so no arguments with it but there is scope to abuse it.
Also, any vehicle can be bought, so top end spec/high end is often bought.
It has made me think that if I buy a used car then motability should be checked as part of the HPI checks.
My first car was a Bedford HA van and we decided not to put side windows in it as that would have meant VAT being paid in retrospect ( this was back in the 1970’s)
Anyone with motability knowledge who can confirm the VAT and other requirements?
Had customers come in to buy a motorhome. Deal done then they produce motability paperwork to get the VAT taken off.
He later queried the situation with another mate who confirmed the VAT matter.he went on to describe someone selling on such a motorhome without declaring the VAT issue to someone not on motability. The new owner would be chased for the VAT. The dealer contacted HMRC and they pursued the original buyer for the VAT.
It seems this is a potential scam and abuse of motability.
My mate was also a rep for a chandlery company and similar motability deals can be had for boats.
Huge discount over a non motability buyer and a watch point for subsequent buyers.
Motability is a great thing so no arguments with it but there is scope to abuse it.
Also, any vehicle can be bought, so top end spec/high end is often bought.
It has made me think that if I buy a used car then motability should be checked as part of the HPI checks.
My first car was a Bedford HA van and we decided not to put side windows in it as that would have meant VAT being paid in retrospect ( this was back in the 1970’s)
Anyone with motability knowledge who can confirm the VAT and other requirements?
The motability part is a bit of a red herring.
HMRC allow certain categories of items to be VAT free for the disabled. See here:
https://www.gov.uk/financial-help-disabled/vat-rel...
A way to demonstrate being disabled is to show motability paperwork. One of the reasons motability cars are so cheap,is that they are automatically VAT free (as only available to the disabled). As you can see from the link there is a declaration form which permit disabled people to declare their status.
The cars have to adapted for the disability in order to qualify for VAT exemption.
HMRC allow certain categories of items to be VAT free for the disabled. See here:
https://www.gov.uk/financial-help-disabled/vat-rel...
A way to demonstrate being disabled is to show motability paperwork. One of the reasons motability cars are so cheap,is that they are automatically VAT free (as only available to the disabled). As you can see from the link there is a declaration form which permit disabled people to declare their status.
The cars have to adapted for the disability in order to qualify for VAT exemption.
It's not specifically Motability that matters, although the Motability scheme is VAT exempt.
If the motor home has been adapted specifically for use by a wheelchair user it can be VAT free.
I think the law/rules were changed around VAT relief and adapted vehicles because of some people buying things like Range Rovers, when they were in short supply and didn't depreciate immediately upon purchase, selling them on and pocketing the VAT having only added a steering wheel knob as an adaptation.
I believe it's all quite complex now and there are limits on how often you can get the VAT relief, etc.
https://www.gov.uk/guidance/vat-relief-on-adapted-...
If the motor home has been adapted specifically for use by a wheelchair user it can be VAT free.
I think the law/rules were changed around VAT relief and adapted vehicles because of some people buying things like Range Rovers, when they were in short supply and didn't depreciate immediately upon purchase, selling them on and pocketing the VAT having only added a steering wheel knob as an adaptation.
I believe it's all quite complex now and there are limits on how often you can get the VAT relief, etc.
https://www.gov.uk/guidance/vat-relief-on-adapted-...
OP, you raised this here and it was dismissed as BS. Any reason for raising it again? It is still BS, after all.
https://www.pistonheads.com/gassing/topic.asp?h=0&...
https://www.pistonheads.com/gassing/topic.asp?h=0&...
The main reason I posted is to get info re the VAT liability. Is it a right-off by HMRC or can they chase it when the vehicle is sold on?
I actually forgot my previous post so apologies, but still query the VAT liability.
I know that suitable mods need to be made to the vehicle to cater for disabilities so that is not in question.
What happens when the vehicle changes hands though?
Restored back to OE without disability mods and sold on? This is where my query on VAT comes in.
I actually forgot my previous post so apologies, but still query the VAT liability.
I know that suitable mods need to be made to the vehicle to cater for disabilities so that is not in question.
What happens when the vehicle changes hands though?
Restored back to OE without disability mods and sold on? This is where my query on VAT comes in.
Cyberprog said:
I've often seen vehicles advertised as 0 tax due to being on disabled tax - seems DVLA don't automatically void it on change of keeper.
Does that not refer to the disabled tax class for vehicles which means zero cost ‘road tax’ ? Different to VAT on the cost of the initial (or subsequent) purchase.Cyberprog said:
I've often seen vehicles advertised as 0 tax due to being on disabled tax - seems DVLA don't automatically void it on change of keeper.
Yes they do. They void all tax at change of keeper. If you wanted to redo it as disabled you would need to provide proof at the PO to do so.Otherwise the PO will amend the V5 and send it to the DVLA.
Scrump said:
The motability part is a bit of a red herring.
HMRC allow certain categories of items to be VAT free for the disabled. See here:
https://www.gov.uk/financial-help-disabled/vat-rel...
A way to demonstrate being disabled is to show motability paperwork. One of the reasons motability cars are so cheap,is that they are automatically VAT free (as only available to the disabled). As you can see from the link there is a declaration form which permit disabled people to declare their status.
The cars have to adapted for the disability in order to qualify for VAT exemption.
...disabled people? Tut, tut.HMRC allow certain categories of items to be VAT free for the disabled. See here:
https://www.gov.uk/financial-help-disabled/vat-rel...
A way to demonstrate being disabled is to show motability paperwork. One of the reasons motability cars are so cheap,is that they are automatically VAT free (as only available to the disabled). As you can see from the link there is a declaration form which permit disabled people to declare their status.
The cars have to adapted for the disability in order to qualify for VAT exemption.
It is open to abuse and I've seen it abused, HMRC aren't daft though and people get caught eventually https://www.manchestereveningnews.co.uk/news/great...
Pica-Pica said:
Scrump said:
The motability part is a bit of a red herring.
HMRC allow certain categories of items to be VAT free for the disabled. See here:
https://www.gov.uk/financial-help-disabled/vat-rel...
A way to demonstrate being disabled is to show motability paperwork. One of the reasons motability cars are so cheap,is that they are automatically VAT free (as only available to the disabled). As you can see from the link there is a declaration form which permit disabled people to declare their status.
The cars have to adapted for the disability in order to qualify for VAT exemption.
...disabled people? Tut, tut.HMRC allow certain categories of items to be VAT free for the disabled. See here:
https://www.gov.uk/financial-help-disabled/vat-rel...
A way to demonstrate being disabled is to show motability paperwork. One of the reasons motability cars are so cheap,is that they are automatically VAT free (as only available to the disabled). As you can see from the link there is a declaration form which permit disabled people to declare their status.
The cars have to adapted for the disability in order to qualify for VAT exemption.
is there something wrong with the term ‘disabled people’?’Wooda80 said:
It is open to abuse and I've seen it abused, HMRC aren't daft though and people get caught eventually https://www.manchestereveningnews.co.uk/news/great...
The deal/scam was that you could buy a car without paying VAT if you had a permanent disability and were a full-time wheelchair user and required a permanent adaption to the car, to enable it to be driven. https://www.thefreelibrary.com/PARALYMPIAN+HELD+ON...
What this lot were doing is taping the controls/adaptions to the car, taking a photo, then taking them off again and giving them back to the dealer. The dealers/salesmen and the purchases were both in on the deal.
When it was being abused there was no official limit to how many cars you could buy each year, so you could legitimately buy 3 or 4 cars per year and if you changed them quickly enough, and had a friendly dealer you could effectively beat the depreciation.
The system has now changed and the checks are much more thorough and you can only buy a new vehicle every 3 years. If the vehicle is purchased VAT free, all maintenance/servicing fees should be VAT free too.
All the rules and regulations, including those on motorhomes are here
https://www.gov.uk/guidance/vat-relief-on-adapted-...
Alucidnation said:
Serious question, but why do disabled people not have to pay VAT?
Or is it a reduced amount they pay?
This link - also given above - tells you. www.gov.uk/guidance/vat-relief-on-adapted-motor-ve...Or is it a reduced amount they pay?
Coincidentally there was an item on one of the BBC morning programmes yesterday looking at this issue as a fraudster was using disabled people to buy several high end cars each a year which he then sold on, defrauding HMRC of a very large amount of tax. They said this was the reason for the introduction of this change which you will see in the link:
the introduction of a limit on the number of vehicles that can be purchased under the relief, with an eligible individual now being able to purchase only one vehicle that meets the qualifying conditions every 3 years
Few wil know that there are two levels of VED if you qualify as having a disability. Full discount if you get the higher rate of the mobility allowance, you also qualify for the motability scheme after 12 months .
If you get the standard rate of mobility allowance you can get 50% discount on VED but it must be paid in one lump , you don't qualify for the motability scheme .
You do qualify for a blue badge at both levels of the scheme .
I was awarded the standard rate in July last year so this is a whole new world for me .
If you get the standard rate of mobility allowance you can get 50% discount on VED but it must be paid in one lump , you don't qualify for the motability scheme .
You do qualify for a blue badge at both levels of the scheme .
I was awarded the standard rate in July last year so this is a whole new world for me .
grumpy52 said:
Few wil know that there are two levels of VED if you qualify as having a disability. Full discount if you get the higher rate of the mobility allowance, you also qualify for the motability scheme after 12 months .
If you get the standard rate of mobility allowance you can get 50% discount on VED but it must be paid in one lump , you don't qualify for the motability scheme .
You do qualify for a blue badge at both levels of the scheme .
I was awarded the standard rate in July last year so this is a whole new world for me .
You qualify for Motability immediately at higher rate, you must have 12 months minimum on your award notice to be able to apply though.If you get the standard rate of mobility allowance you can get 50% discount on VED but it must be paid in one lump , you don't qualify for the motability scheme .
You do qualify for a blue badge at both levels of the scheme .
I was awarded the standard rate in July last year so this is a whole new world for me .
Didn't realise VED was tax free as well, I know someone on motability with a nice car even though it's meant to be their parents as they are fit and able and don't even live near them so aren't running errands.
Imo they should bring back the old blue cars like the scheme was originally designed for as it's not fit for purpose.
Imo they should bring back the old blue cars like the scheme was originally designed for as it's not fit for purpose.
Wooda80 said:
It is open to abuse and I've seen it abused, HMRC aren't daft though and people get caught eventually https://www.manchestereveningnews.co.uk/news/great...
They got away with it though as all they had to pay back just £1 each Gassing Station | Speed, Plod & the Law | Top of Page | What's New | My Stuff