Buying a pickup + VAT
Discussion
I understand that they are considered commercial vehicles and as such don't have VAT included in the purchase price, but what about being bought by private individuals for personal use?.
If buying from a dealer, would the VAT be paid directly to the dealer or to HMRC?. More importantly, if buying from a private seller who used it as a business vehicle, would the VAT be paid to them and they then pay it to HRMC?. I can just see a nightmare scenario where you get a letter from HRMC demanding payment of VAT after the seller added it to the price you paid them directly.
On a more touchy note, how much hassle would it be to become VAT registered so you could save on paying VAT in the first place?. On a new or even used vehicle you could reduce the initial cost by thousands of pounds which is very appealing. I did check the HRMC website regarding VAT registration, but was wondering if anyone "has a mate" who has gone this route.
If buying from a dealer, would the VAT be paid directly to the dealer or to HMRC?. More importantly, if buying from a private seller who used it as a business vehicle, would the VAT be paid to them and they then pay it to HRMC?. I can just see a nightmare scenario where you get a letter from HRMC demanding payment of VAT after the seller added it to the price you paid them directly.
On a more touchy note, how much hassle would it be to become VAT registered so you could save on paying VAT in the first place?. On a new or even used vehicle you could reduce the initial cost by thousands of pounds which is very appealing. I did check the HRMC website regarding VAT registration, but was wondering if anyone "has a mate" who has gone this route.
If you buy the vehicle from a VAT registered person (either dealer, small company or private person) generally the price will say £10000+VAT.
You pay the seller of the pick up say £10000 + £1750(VAT)= £11750.
The seller will give you a VAT reciept which says his name address and VAT number.
Every three months the seller does a VAT return saying what he has bought and sold and sends a cheque to HMRC (in this case £1750) less what VAT he has paid out.
If the buyer is VAT registered they reclaim the VAT in a similar way.
In your case if you are not running a business and not VAT registered then you cannot reclaim the VAT.
You can't register for VAT and then deregister to claim the VAT back.
If you are buying from an individual they might accept say £5000+VAT and £5000 cash in a similar way that you can always get a dodgy builder to avoid VAT.
You pay the seller of the pick up say £10000 + £1750(VAT)= £11750.
The seller will give you a VAT reciept which says his name address and VAT number.
Every three months the seller does a VAT return saying what he has bought and sold and sends a cheque to HMRC (in this case £1750) less what VAT he has paid out.
If the buyer is VAT registered they reclaim the VAT in a similar way.
In your case if you are not running a business and not VAT registered then you cannot reclaim the VAT.
You can't register for VAT and then deregister to claim the VAT back.
If you are buying from an individual they might accept say £5000+VAT and £5000 cash in a similar way that you can always get a dodgy builder to avoid VAT.
Thanks for the replies. So I would have to pay VAT to whoever I bought it from regardless of whether I was VAT registered or not.
Never thought about a specific VAT receipt from the seller...assuming they were registered. I guess not many of these are owned by non VAT registered individuals. I would just have to be careful that someone didn't try it on and charge me VAT on something they shouldn't.
Don't run into such issues buying cars from private sellers so I just want to be clear about what I should be paying.
Never thought about a specific VAT receipt from the seller...assuming they were registered. I guess not many of these are owned by non VAT registered individuals. I would just have to be careful that someone didn't try it on and charge me VAT on something they shouldn't.
Don't run into such issues buying cars from private sellers so I just want to be clear about what I should be paying.
its pretty simple, if your buying your commercial vehicle from a business (VAT registered of course) you'll be charged VAT on top, or VAT will be included in the price.
only if you buy it from someone private or a non VAT registered business will you avoid paying VAT.
hope this clears it up
only if you buy it from someone private or a non VAT registered business will you avoid paying VAT.
hope this clears it up
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