Quick question reg VAT and car dealers

[nickfrog]

Hiya. I appreciate that a second hand car dealer pays VAT on his profits BUT, if he sells a car at say, a £2K loss, and sells another one at a £2K profit, can he offset the loss on one against the profit on the other and pay £0 VAT ? Or does the VATman considers both transaction on their own merits and the dealers still has to pay VAT on the £2K "profit" ?

[khushy]

better off in the business section IMHO!

[MrCooke]

No. You don't get VAT back on a loss.

[Magic919]

They pay VAT on the gross margin and it's a per-vehicle basis. They cannot offset anything.

[nickfrog]

Thanks guys.

[Greenslade]

some creative accoutning here would deny HMRC any monies due !