Taxi Driver Online

if you pay vat yes, but dont pay vat if theres no vat number on the invoice

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Of all the things ive lost, i miss my mind the most

What I mean is, if I buy a second hand car from a private seller there is no VAT. I am VAT registered so if I later sell this car that did not have VAT when I bought it, do I have to pay VAT on the sale of the car to the VAT man?

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Grandad,

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Of all the things ive lost, i miss my mind the most

But is the second hand car a taxable supply If no Vat was paid when it was bought?

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Grandad,

Yes if you are registered for VAT. If it were your own private car or taxi and you are not registered, then no.

I will have to check this out with the VAT man when I get home from my hols. Because if I buy a new car from a main dealer then I get charged VAT and I claim back that VAT. When I sell that car I account for VAT on the sale price. However when I buy a second hand car from that same dealer there is no VAT on the receipt and I can't claim any back. So when I sell that car you are saying that I then have to account for VAT on the sale price.

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Grandad,

I have just read this.
http://www.hmrc.gov.uk/vat/start/schemes/margin.htm
And it would seem that I would only have to account for VAT on any profit I made from the sale of the car.

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Grandad,

Years ago there was some weird "vat included" on ALL used car sales at 7/23rds the value, not sure about now

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Of all the things ive lost, i miss my mind the most

No VAT on second hand cars as a rule. Unless they are a qualifying vehicle which is a car that had the VAT reclaimed by the previous owner.

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Grandad,

VAT rules on new and used cars are complex, mainly to stop people claiming the VAT back on their cars; that's one reason I lease cars as I can claim all the VAT back on the lease fees.

How does anyone make a profit on selling a used car (apart from used car dealers)? The rate at which cars devalue it's virtually impossible.

Simples, £500 from the auctions, £1000 sold on Ebay

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Of all the things ive lost, i miss my mind the most

Nothing complicated about it, firstly only those who are VAT registered can claim it back, 2nd you just need a VAT invoice, wheres the problem?

Lease/rent you pay monthly and claim back each quarter, on an outright purchase you claim it back in one lump, also on some hires when you pay all the vat upfront





Simples, £500 from the auctions, £1000 sold on Ebay

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Of all the things ive lost, i miss my mind the most

That is my point. I buy a car from Joe Bloggs for £3,000 with no VAT as it is a private sale. I run the car for 2 years as a taxi and sell it for £500 and I do not have to account for VAT on the sale price.

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Grandad,

I think your talking at cross purposes

Roy seems to think a dealer (trade or private) cant make a profit, OR that cars devalue - which they do OVER TIME - but your getting the useage

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Of all the things ive lost, i miss my mind the most