Vat Qualifying?

[groucho]

Been looking through the BMWs for sale from the dealership network. Some have Vat Qualifying next to the price. Sorry to be a thicko, but what exactly does that mean?

Does it mean I could pay Vat on top of the price then claim it back as I'm vat registered?

If so, pretty pointless, no?

[Deva Link]

VAT is included in the price but it can be broken out and recovered if the vehicle is bought by a business for the business's exclusive use.

Someone could "buy" the car using business contact hire and the deal would be a little cheaper as the finance company would be able to recover the VAT.

[whitechief]

"VAT Status and Used Cars

The use to which a car is put will determine its status for VAT purposes. In turn, that VAT status will determine whether VAT should be charged on the disposal of the car and hence whether there is any VAT available for recovery in the hands of a subsequent owner.

If VAT has been fully recovered on a car, that car will be “VAT qualifying”. If a qualifying car is sold VAT will be chargeable on its sale, and recoverable by the purchaser under the rules outlined above.

If input VAT recovery has been restricted on a car at any point in its life, that car becomes “Non-Qualifying”. VAT will not be due on the sale of a non-qualifying car."

http://www.cartax.co.uk/Articles/Article_When_Does...

[groucho]

whitechief said:

If VAT has been fully recovered on a car, that car will be “VAT qualifying”. If a qualifying car is sold VAT will be chargeable on its sale, and recoverable by the purchaser under the rules outlined above.

So, if a car is offered at £30k could I claim 17.5% of that back?

[chard]

groucho said:

whitechief said:

If VAT has been fully recovered on a car, that car will be “VAT qualifying”. If a qualifying car is sold VAT will be chargeable on its sale, and recoverable by the purchaser under the rules outlined above.

So, if a car is offered at £30k could I claim 17.5% of that back?

No not unless the vehicle is registered as a commercial. A leasing/rental company can, who will then charge you VAT on top of your rentals. When they resell the car VAT will become payable on the resale value.

[Deva Link]

groucho said:

So, if a car is offered at £30k could I claim 17.5% of that back?

Only, as I understand it, if the vehicle was 100% used for business (like other business equipment). Any private use at all means the VAT can't be recovered.