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Is this a mistake?

CYCLOPATH said:
Out of interest , why are some of the vans advertised as non vat qualifying, where as other include VAT?
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According to http://www.motor-trade-insider.com/vat/

In basic terms this means that if the car was originally sold to a VAT registered company or individual then they will have reclaimed the VAT on the purchase price so when the car is sold on there is still a VAT element to be recovered. When the car is eventually sold to a private individual who is not VAT registered there is no further VAT recoverable.
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All if the Californias on the VW used stocklist are vat inc, they need to specify when they list & they don't always, according to the Liverpool sales exec I asked about this...
 
Commercial vehicles are subject to VAT even secondhand in this case Transporters. Genuine Californias aren't subject to VAT when secondhand as not a commercial vehicle.
I think that a converted Transporter which has been reregistered as a camper would be exempt from VAT.
 
I don't think it's as simple as that BJG - there is VAT on almost everything but we don't realise as it's included in the price, the difference is that a VAT registered business can claim it back.

Once the item - in this case, a VW California, has been bought by someone who CAN'T claim the VAT back, then it ceases to attract VAT when sold.
 
I suspect the confusion comes from the California being supplied by the Commercial side of VW & not the Car sales.

The Commercial salesmen will be selling to Business buyers probably 90% of the time where VAT is not added to the price quoted. VAT registered Buyers will be claiming the VAT back later, this meaning that these Buyers talk/think in pre VAT figures.

I'm sure that California Owners have had confusing price quotes on spares or accessories for the same reason.
VAT is a complicated subject that looks simple but...

As a previously VAT registered person I could have bought a Transporter from a private seller without VAT added but would have to add VAT when I sold it. Its illegal to charge VAT if you aren't registered by the way.
 
B J G said:
As a previously VAT registered person I could have bought a Transporter from a private seller without VAT added but would have to add VAT when I sold it. Its illegal to charge VAT if you aren't registered by the way.
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I'm sure that's just a typo, but misleading as it is. You would have had to pay the vat, but would have been able to reclaim it as input vat on your next return. Being vat registered doesn't mean you don't pay the vat, but it does mean it doesn't hurt.
 
T4WFA said:
I'm sure that's just a typo, but misleading as it is. You would have had to pay the vat, but would have been able to reclaim it as input vat on your next return. Being vat registered doesn't mean you don't pay the vat, but it does mean it doesn't hurt.
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Not sure what the 'Typo' referred to is but on vehicles VAT can only be reclaimed on what is termed 'Qualifying vehicles' such as vans & pickup trucks. Never attempted to reclaim VAT on a Motorhome or Camper so not qualified to comment on that.
I did have an Employee who thought that if he bought a Pickup I could reclaim the VAT on his behalf!!

I'm sure there's an Accountant on here who can deal with this better than me as I was only trying to give a bit of an explanation on why confusion between Salesmen & the Public can arise.
 
B J G said:
As a previously VAT registered person I could have bought a Transporter from a private seller without VAT added but would have to add VAT when I sold it. Its illegal to charge VAT if you aren't registered by the way.
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I think this is the confusing comment.
The private owner would have bought the vehicle, VAT included and could not have claimed back the VAT.
When the private owner sells the vehicle the price would be VAT included.

If you, as a VAT registered business, buys that vehicle for business use then I presume you can claim the included VAT element?
If that is the case then you would resell the vehicle at a lesser price but + VAT.

Hope that is a correct interpretation.
 
I think the correct answer involves 'the margin scheme', but as BJG said, perhaps we need an accountant.

However, for the point of the thread.........
The buyer of a Cali is unlikely to be registered for VAT. Even if they are, they are most likely buying for mostly private use. The dealer should therefore show the full price inc the VAT.

Because they spend all day selling vans (not Cali's) to VAT registered businesses, their default settings on the system will be to exclude VAT and often they forget to notice when they come to list a Cali.

There is a clue. If the Cali is about 20% cheaper than it should be, they forgot to add the VAT ;)
 
^^^ this, as told to me by a salesman, they just don't swap the inc/exc thing as they don't think. They are all VAT included.

Likewise, I own a van, I paid the vat, I can sell it vat inc.
 
WelshGas said:
I think this is the confusing comment.
The private owner would have bought the vehicle, VAT included and could not have claimed back the VAT.
When the private owner sells the vehicle the price would be VAT included.

If you, as a VAT registered business, buys that vehicle for business use then I presume you can claim the included VAT element?
If that is the case then you would resell the vehicle at a lesser price but + VAT.

Hope that is a correct interpretation.
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Not correct as a Private seller cannot pass on the VAT or pretend to.
To reclaim VAT the business Buyer needs a valid VAT registration Number on the Invoice.
No VAT number -- No VAT. But the business Buyer would charge VAT on the sale.
Hence my saying you need an Accountant to keep you straight.
 
B J G said:
Not correct as a Private seller cannot pass on the VAT or pretend to.
To reclaim VAT the business Buyer needs a valid VAT registration Number on the Invoice.
No VAT number -- No VAT. But the business Buyer would charge VAT on the sale.
Hence my saying you need an Accountant to keep you straight.
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Very clearly put! Certainly if you're a private individual you can't include vat in a sale so there is no vat for a business to claim back.
When I sell my transporters I buy them off my business +vat then sell them on with no vat.
 
Freeley said:
Very clearly put! Certainly if you're a private individual you can't include vat in a sale so there is no vat for a business to claim back.
When I sell my transporters I buy them off my business +vat then sell them on with no vat.
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Just curious.
Say you bought it of the business for £1000 + VAT --£1200. Would you sell it for £1000 or £1200 plus your margin?
I was a Sole Trader so couldn't have done that.
 
B J G said:
Not correct as a Private seller cannot pass on the VAT or pretend to.
To reclaim VAT the business Buyer needs a valid VAT registration Number on the Invoice.
No VAT number -- No VAT. But the business Buyer would charge VAT on the sale.
Hence my saying you need an Accountant to keep you straight.
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Correct me if I am wrong but if I, as a Private buyer, purchase a new vehicle that costs £12,000 it will include VAT at 20%, so the actual vehicle cost £10,000 + £2,000 VAT, which as a Private buyer I pay. If I was a VAT registered business I could claim back the VAT.

So 4 years on the vehicle is sold by the Private buyer for £6,000.

Does the Business buyer sell the vehicle for £6,000 + VAT or £5,000 + £1,000 VAT?
 
WelshGas said:
Correct me if I am wrong but if I, as a Private buyer, purchase a new vehicle that costs £12,000 it will include VAT at 20%, so the actual vehicle cost £10,000 + £2,000 VAT, which as a Private buyer I pay. If I was a VAT registered business I could claim back the VAT.

So 4 years on the vehicle is sold by the Private buyer for £6,000.

Does the Business buyer sell the vehicle for £6,000 + VAT or £5,000 + £1,000 VAT?
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This all depends on what the vehicle is.
If a genuine 'commercial vehicle' (van, pickup, or lorry) the VAT reg. business would reclaim the VAT. VAT would be charged on the sale.
That's why you see many business users with double cab pickup trucks (like a car inside).
Whether VAT was in the quoted price or plus the quoted price would have to be clarified as to the VAT status.

As a Buyer always ask if the quoted price is including VAT or not when dealing with business people.

If a CAR is purchased it is not possible to reclaim the VAT on the vehicle or accessories (I tried on simple things like mudflaps without success, could reclaim if bought later, after purchase date). There would be no VAT on the sale either as a trade in or to a Private Buyer.

Incidentally Insurance tax isn't a form of VAT & can't be reclaimed by business's. They have to take it as a direct out of pocket cost same as the rest of us.


Hopefully not muddied the waters any more.
 
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B J G said:
Just curious.
Say you bought it of the business for £1000 + VAT --£1200. Would you sell it for £1000 or £1200 plus your margin?
I was a Sole Trader so couldn't have done that.
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If you're not worried about a vat inspection then you could buy it off the business for peanuts - using your example if the vehicle had a genuine worth of £1000+vat then you could buy it off the company for say £100+vat, then sell it on for £1000 or even £1200 if market conditions allowed.
In my case I tried to keep it above board, I looked on autotrader to see what vans of my age and condition were going for and based my value on the lowest priced one I could see which was £9600+vat (so £11520 total). I then sold it on for £12k with no vat
 
Freeley said:
If you're not worried about a vat inspection then you could buy it off the business for peanuts - using your example if the vehicle had a genuine worth of £1000+vat then you could buy it off the company for say £100+vat, then sell it on for £1000 or even £1200 if market conditions allowed.
In my case I tried to keep it above board, I looked on autotrader to see what vans of my age and condition were going for and based my value on the lowest priced one I could see which was £9600+vat (so £11520 total). I then sold it on for £12k with no vat
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Having gone through both VAT inspections and even worse Inland Revenue inspections I like you kept very much on the safe side.
 
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