Ford Wildtrack - strange VAT question
Discussion
A chap is selling a Wildtrack 3.2tdci - private advert
He owns a large-ish company selling elec components to the trade.
Truck was bought through his company for a director (in 2019)
When I asked about the VAT he said the following which i don't quite understand
'There's no VAT on the price. Once sold I'm going to buy it off my company and make a bit of profit from it'
What does that mean and is there a chance I could get a knock from HMRC in future?
Thanks in advance
He owns a large-ish company selling elec components to the trade.
Truck was bought through his company for a director (in 2019)
When I asked about the VAT he said the following which i don't quite understand
'There's no VAT on the price. Once sold I'm going to buy it off my company and make a bit of profit from it'
What does that mean and is there a chance I could get a knock from HMRC in future?
Thanks in advance
If you're buying it from him privately, then no, it's nothing to do with you. You ust pay him the price.
Say he sells it fo you for £15000
He is possibly buying it from his company for £10k+VAT (£12000) and making £3000 himself. Thats between him and HMRC, nothing to do with you.
The VAT qualifying transaction happens between him and his company. Once you buy it from him, the VAT is 'gone' because it is not a VAT qualifying transaction.
Say he sells it fo you for £15000
He is possibly buying it from his company for £10k+VAT (£12000) and making £3000 himself. Thats between him and HMRC, nothing to do with you.
The VAT qualifying transaction happens between him and his company. Once you buy it from him, the VAT is 'gone' because it is not a VAT qualifying transaction.
Why would you "ask about the VAT"? Are you VAT registered?
As a retail customer all you care about is the actual amount of cash you have to hand over for the vehicle.
FWIW there's a special VAT scheme for 2nd hand car traders although I can't see its relevance in this case,
https://www.gov.uk/guidance/using-the-vat-margin-s...
As a retail customer all you care about is the actual amount of cash you have to hand over for the vehicle.
FWIW there's a special VAT scheme for 2nd hand car traders although I can't see its relevance in this case,
https://www.gov.uk/guidance/using-the-vat-margin-s...
Thanks for the replies
I asked about the VAT as its a commercial vehicle still owned by his company and he'll have claimed vat back.
As he said he'd be buying it from his company once its sold to someone else (possibly me) then it just seemed pertinent to clarify.
I'm a private buyer
If he'd bought off his company already registered it in his own name then it would have seemed a bit more obvious
I just wasn't sure as its not really my area, plus most trucks being sold are plus vat
I asked about the VAT as its a commercial vehicle still owned by his company and he'll have claimed vat back.
As he said he'd be buying it from his company once its sold to someone else (possibly me) then it just seemed pertinent to clarify.
I'm a private buyer
If he'd bought off his company already registered it in his own name then it would have seemed a bit more obvious
I just wasn't sure as its not really my area, plus most trucks being sold are plus vat
Edited by Dog Biscuit on Saturday 12th April 17:49
Just beware of giving any money, save for a small deposit, at this stage.
Basically, its not his to sell until he buys it from the company, at which point there will be a delay I imagine, to obtain the V5. It is unlikely the company would issue the V5 (ie change the registered keeper) to anyone except the (intermediate) seller in this instance, unless its a small company and this intermediate has control over the process. Normally its about 5 days. Then, once its actually his, he can change the registered keeper again.
Of course, that will put another RK onto the registration.
If he doesn't have the bridging finance capability to buy it before he onwards sells it, then you are financing the venture so have a think about each stage which needs to happen, what could go wrong at each stage, where your money is at that point and how you might recover it (or the truck) back.
Basically, its not his to sell until he buys it from the company, at which point there will be a delay I imagine, to obtain the V5. It is unlikely the company would issue the V5 (ie change the registered keeper) to anyone except the (intermediate) seller in this instance, unless its a small company and this intermediate has control over the process. Normally its about 5 days. Then, once its actually his, he can change the registered keeper again.
Of course, that will put another RK onto the registration.
If he doesn't have the bridging finance capability to buy it before he onwards sells it, then you are financing the venture so have a think about each stage which needs to happen, what could go wrong at each stage, where your money is at that point and how you might recover it (or the truck) back.
Dog Biscuit said:
...... he'll have claimed vat back.
Only if he himself (not the company) is VAT registered. The company will be obligated to sell it as base+VAT and collect the VAT for the taxman.As he said he'd be buying it from his company once its sold to someone else (possibly me) then it just seemed pertinent to clarify.
Dog Biscuit said:
I'm a private buyer
If you're not VAT registered yourself, then this type of arrangement (buying a commercial vehicle with no VAT) is probably better, because in the other type of arrangement (base+VAT) you'd need to pay the VAT but be unable to reclaim it. Think, self employed plumber who earns so much he needs to be VAT registered, buys his business a van, etc.Owner and registered keeper are 2 separate things. Clearly states on the front of the V5 that this is the case.
He could have bought it from his company last week, last month, or next month if he wants.
To the OP, it will not affect you at all as a private buyer what his VAT affairs are.
He could have bought it from his company last week, last month, or next month if he wants.
To the OP, it will not affect you at all as a private buyer what his VAT affairs are.
paul_c123 said:
Just beware of giving any money, save for a small deposit, at this stage.
Basically, its not his to sell until he buys it from the company, at which point there will be a delay I imagine, to obtain the V5. It is unlikely the company would issue the V5 (ie change the registered keeper) to anyone except the (intermediate) seller in this instance, unless its a small company and this intermediate has control over the process. Normally its about 5 days. Then, once its actually his, he can change the registered keeper again.
Of course, that will put another RK onto the registration.
If he doesn't have the bridging finance capability to buy it before he onwards sells it, then you are financing the venture so have a think about each stage which needs to happen, what could go wrong at each stage, where your money is at that point and how you might recover it (or the truck) back.
The way he pitched it that his way of doing it would not add another RKBasically, its not his to sell until he buys it from the company, at which point there will be a delay I imagine, to obtain the V5. It is unlikely the company would issue the V5 (ie change the registered keeper) to anyone except the (intermediate) seller in this instance, unless its a small company and this intermediate has control over the process. Normally its about 5 days. Then, once its actually his, he can change the registered keeper again.
Of course, that will put another RK onto the registration.
If he doesn't have the bridging finance capability to buy it before he onwards sells it, then you are financing the venture so have a think about each stage which needs to happen, what could go wrong at each stage, where your money is at that point and how you might recover it (or the truck) back.
ie I buy it for asking price.
fill out the V5 online and await the new V5 as the 2nd RK
He then buys it from the company retrospectively
Is that actually possible?
Dog Biscuit said:
The way he pitched it that his way of doing it would not add another RK
ie I buy it for asking price.
fill out the V5 online and await the new V5 as the 2nd RK
He then buys it from the company retrospectively
Is that actually possible?
That's the most practical approach, I would think.ie I buy it for asking price.
fill out the V5 online and await the new V5 as the 2nd RK
He then buys it from the company retrospectively
Is that actually possible?
There is no need for him to be the registered keeper, since he is effectively buying the truck from his company and at the same time selling it to you (whilst keeping the profit element for himself).
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