Vat & None Vat qualifing

[Kitesurfer]

Hi

Looking to buying a Cali.
Why do some adverts quote price + Vat
Then others quote price none Vat Qualifying.

Dont like paying Tax

We are all taxed to the hilt, then the government wast it.

Terry

 

[calikev]

Hi this is my understanding although I might be wrong but.
The Cali is a commercial vehicle that at some point will need the vat paying on it
If I buy a Cali as a private individual then I will pay vat. When I sell the vehicle later on it will be vat free as I have paid it and the government are happy.
If I buy a Cali and I am in business I will pay the vat and then claim it back as the government
Would not have had their share when I sell it I have to charge vat
I hope this helps

 

[Dibz]

Re: Vat & None Vat qualifing

To add to this, the 'VAT Qualifying' bit relates to whether VAT can be charged (or reclaimed by business) on the difference when selling second hand.

Lets see if I can get this right as an example.

Cali sold new to a business who claim the VAT back so no vat has be paid on the vehicle. This is then part exchanged or sold back to a dealer who sells it on. Because the vehicle hasn't had any VAT paid on it yet, the dealer has to add VAT, but they only add VAT on the difference between what they bought it in for and what they sell it for, not the whole value of the vehicle.

This 'secondary' VAT is the bit that is qualifying or not, I.e. a business buying could claim the vat back on that chunk, or they might not be able to.

Hopefully that is right, it is my interpretation of it when I tried to find out what it meant a while ago someone put me right if I'm wrong please

 

[2into1]

I think the previous poster is referring to the 'margin' VAT scheme, which applies to all CARS passing through (VAT registered) dealers. The situation is different for VANs, and the Cali being a car, but sold by van dealers gets caught up in some unnecessary confusion.

In the simplest terms: The Cali is a car. Private buyers can't avoid the VAT on new ones. When they buy a 2nd one, they should only be shown a single (final) price.

In more detail:
The confusion with Cali's from VW dealers is that they are used to selling panel vans to VAT registered businesses. Van buyers pay the vat to the dealer but can then reclaim it, so they really are only interested in the price without VAT. When that business sells the van, they have to charge VAT.
If a business buys a 2nd hand but 'VAT qualifying' van, the same story applies.
If they buy a non qualifying van, the VAT isn't recoverable.

When a Cali is sold to a PRIVATE INDIVIDUAL, they have to pay the VAT and can't reclaim it.

Because the dealers are used to dealing with businesses, AND BECAUSE THE VW WEBSITE IS BUILT FOR SELLING TO BUSINESSES, (at least it is set up by default like that), Cali's on there sometimes pick up the ''plus VAT" or "VAT Qualifying" flag, often incorrectly.

If a Cali is listed as 'plus VAT' then I'd ring the dealer to see if they've ticked the wrong box when they loaded it onto the website. I suspect they have. The price you see may include VAT.

Oli (who buys Cali's to rent out) will be one of the few here interested in VAT. I suspect he reclaims the VAT on purchase, charges VAT on the rentals, and effectively charges VAT when he sells the vans on. (Even if he advertises them at a flat price, it will include the VAT he must pay on the sale... That VAT may be recoverable to another VAT registered business BUT NOT TO PRIVATE INDIVIDUALS).

 

[Kitesurfer]

Thank you - Calikev -Didz - Wilupo7

Thort i could get away from paying the Tax Man, Dam Shame that.

Thank you all for explaining the difference between both them.

I will query the dealer if he has ticked the right box when discussing the purchase price.

Regards

Terry