Do you pay VAT on a second hand car?

[erolb]

Hi

Main dealer told me you don't pay VAT on a second hand car. Is this wollox? I heard you either pay it on the total pice or just the profit they make.

[marshalla]

HMRC guidance to motor traders : http://www.hmrc.gov.uk/vat/sectors/motors/selling-...

[BuzzLightyear]

No, you don't usually pay VAT on a second-hand car unless it's advertised as "+VAT" - think this only arises if the VAT was not paid on purchase (?because it was reclaimed as a business expense? Someone more knowledgable will no doubt correct me or confirm).

[Cupramax]

I believe theres two ways of doing it. They can either charge it on their profit element of the sale or the entire transaction, either is acceptable. They just need to keep a record of which for the HMRC.

[Bemmer]

A private individual doesn't pay VAT on a used vehicle, but the dealer pays VAT on the profit margin.

[erolb]

Bemmer said:

A private individual doesn't pay VAT on a used vehicle, but the dealer pays VAT on the profit margin.

Ah - Many thanks

[Roo]

Bemmer said:

A private individual doesn't pay VAT on a used vehicle, but the dealer pays VAT on the profit margin.

Unless it's a VAT qualifying vehicle.

[Denis O]

Unless you buy a non CSW Defender, or other commercial vehicle, which are advertised +VAT which is shown separately on the invoice.

[Bemmer]

Roo said:

Unless it's a VAT qualifying vehicle.

It doesn't make any difference if it's VAT qualifing to the private buyer it's the dealer pays the VAT.

[M5 Russ]

BuzzLightyear said:

No, you don't usually pay VAT on a second-hand car unless it's advertised as "+VAT" - think this only arises if the VAT was not paid on purchase (?because it was reclaimed as a business expense? Someone more knowledgable will no doubt correct me or confirm).

Does that mean a private buyer will pay it if the advert says "+VAT" ?

[AndrewW-G]

M5 Russ said:

BuzzLightyear said:

No, you don't usually pay VAT on a second-hand car unless it's advertised as "+VAT" - think this only arises if the VAT was not paid on purchase (?because it was reclaimed as a business expense? Someone more knowledgable will no doubt correct me or confirm).

Does that mean a private buyer will pay it if the advert says "+VAT" ?

Only if it is a commercial vehicle. As per bemmer's post, for the purpose of this discussion, the dealer has the pleasure of paying VAT on the difference between their purchase and sale price for a used car

[Roo]

Bemmer said:

Roo said:

Unless it's a VAT qualifying vehicle.

It doesn't make any difference if it's VAT qualifing to the private buyer it's the dealer pays the VAT.

Except a VAT qualifying vehicle will have a VAT analysis on the invoice whereas a non VAT qaulifying vehicle won't.

It's why chauffeur firms like to buy ex-demo cars as most are VAT qualifying and it can be claimed back on the purchase.

[Bemmer]

Roo said:

Except a VAT qualifying vehicle will have a VAT analysis on the invoice whereas a non VAT qaulifying vehicle won't.

It's why chauffeur firms like to buy ex-demo cars as most are VAT qualifying and it can be claimed back on the purchase.

But the answer to the original question is NO isn't it!