Lancia Motor Club

http://www.ebay.co.uk/itm/1990-LANCIA-THEMA-8-32-BLACK-/222223884957?hash=item33bd93629d:g:fOIAAOSwV0RXtrLC


P

Advert states final price PLUS VAT!!!! Now I've never come across anyone charging VAT on a used car before... Something dodgy there so ask before you bid!!

I have seen this before, always thought it was a business selling off its assets or if not, someone pulling a fast one, anyone can clarify?


P

If a company has paid vat on the item they should claim it back when selling, so they should charge VAT. Although I think it’s dodgy when it comes to ebay, as the bidding price should be inclusive of VAT, not add 20% on top of the winning bid. That will catch someone out. 

Used cars are not subject to VAT like commercial vehicles.

Used car dealers who are registered for VAT pay VAT on the margin they make on the car, so, if it sells for £5000 and they paid £4400 for it they pay VAT on the margin of £600 (which works out at £500 plus £100 VAT).

Any attempt to add VAT onto the selling price of the car would probably be unsupportable in court.

Assume this car sells for £9100 asking price do you think the dealer would pay the added £1820 over to HM Customs and Excise?

Anyone actually daft enough to pay the extra 20% might be well advised to tell the seller that he's reporting them to HM Customs and Excise!

Guy

Guy is correct (if only HM Customs & Excise still existed though.....!). Jay's scenario wouldn't normally apply, as generally companies are not allowed to claim back all the VAT on cars that they buy either. Plus, a Thema 8.32 as a company car??

As Guy states, any VAT due under the second hand margin scheme should be absorbed in the price, unlike 'normal' VAT it is due from the seller, not the buyer.

I stand corrected, having never run a company car I assumed it like most company goods/assets where you buy with VAT claiming back and then sell with VAT giving the amount to HMRC.   

Can I just add that companies or sole traders can't claim back any VAT on a car bought for business use, it's got to be a van with no rear seats/side windows (although some crew cab type vehicles do qualify).
The only trading entities that can reclaim VAT are new car dealers (but they have to pay VAT on the sales value) and Taxi companies who can reclaim 1/6th (equivalent to 20% on cost) of the purchase price of a new or used vehicle (even if bought from a private individual) from HMRC (but not HM Customs & Excise....)
Guy

Ironically my bemoaning of the loss of HM C&E has little to do with VAT, which HMRC have generally plodded on with. Off topic I know, but the UK now totally lacks any form of homogeneous customs service, with Border Force doing a bit of this, and HMRC doing a bit of that, with this rest falling through the gaps.

It doesn't matter as much while we are in the EU, but it will need fixing when we leave, and it will cost a lot of money if the country wants proper border controls.

HMRC also do housing benefits and the Rent Officer's job now. UK government departmental responsibilities look like a fire sale in a banana republic these days.