Avoiding VAT on a used car...

s_b

if its such a problem mention to your advisor you are thinking of going limited

leveller2911

s_b wrote: »

if its such a problem mention to your advisor you are thinking of going limited

What difference does being a LTD company opposed to sole trader have with reclaiming vat??......

Sumguy there is NO option for claiming vat back unless your registered for vat with HMRC in which case you may well lose some/all of your existing work because you will need to charge your customers vat on your labour which will make you expensive compared to Joe Bloggs ........

s_b

What difference does being a LTD company opposed to sole trader have with reclaiming vat??......

i suggest we let the OP ask this one tomorrow seeing as he is desperate to save a dolla:)

sumguy

Leveller is right though...

Being a Ltd Company or Sole Trader is irrelevant to this scenario... Vat registered is whats important in order to reclaim VAT, but as high lighted to benefit in reclaiming, means you would then need to charge VAT... so their is no gain...

I have one more question to ask my accountant though... hyperthetical of course...

s_b

hyperthetical of course..

oh yes
but depending what you do the benefits might be more than you think:)

sumguy

This is my hyperthetical question...

Let say I tell my accountant my scenario... My work vehicle has started to develop some troubles and has become unreliable... I want to buy a more reliable vehicle, I have seen an amazing one but I cant afford it because of the additional VAT... he says to me, let me help you out... You helped me out last year when I needed your assistance and I consider you a good friend...

How about you let me purchase the vehicle for you and you pay me the monies over the coming months. Perfect. Lets say its 10k with VAT. He purchased the van for me and over the next month or so I pay him back in full as promised and he signs the vehicle over to me providing me with a receipt for 10k.

In April he reclaims the VAT and forwards it on to me, additionally, in April I file my 10k receipt and receive my 28% allowance for a works vehicle.

:T Wheres the problem ?? :j

s_b

you will crash it
you break a leg
your wife runs off with a fisherman
it blows up tomorrow and you demand SOGA off your accountant seeing as he now sells cars:rotfl::rotfl::rotfl:

Tiddlywinks

Are you actually trading now yourself? Good grief, you sound like you need to learn a thing or two about your responsibilties and liabilties.

The vehicle will be purchased and an invoice issued to the purchaser - the log book will be sent off to change the registered keeper. If the keeper is different to the purchaser then that will look strange in an audit.

The vehicle will need to be maintained - those bills will need to be processed through the accounts - mileage will need to be accounted for as well..... all through the books. Get my drift?

Oh, and let's just remember that intentional false accounting (which this would be) is fraud - no excuses.

property.advert

vax2002 wrote: »

Most second hand cars dont have VAT, only commercials, probably with the exception of ex-police cars

Where do you think the VAT goes then ? just disappears ?

New the car is £20,000 plus VAT so £24,000. Second hand it is £12,000 which is actually £10,000 plus VAT.

You just cannot reclaim the VAT on a second hand purchase, though it still exists. Of course the VAT on he depreciated part has indeed vanished, into the coffers of the tax man.

hethmar

sumguy - you really think your accountant would be up for defrauding HMRC :eek: They have an awful lot of power - I cant imagine the guy would be so stupid to get involved in any sort of fiddle which clearly is not viable anyway.

Look around for a van that is being sold privately then you wont be worried about VAT shown on an invoice. Otherwise register for VAT, but to be honest, you seem to have such little understanding of accounting I think you may get into some real bother keeping VAT records.