Urgent help please

Moody_Mare

I am looking at buying a commercial 4x4 fits with my lifestyle I am a private buyer not business.

I have found the perfect vehicle but have to pay VAT on it but I am confused?
First owner private individual bought it as an ex demonstrator. So by my reckoning did not reclaim VAT

Second & Third owners were business do not know if they are VAT registered.

The seller a large dealership is asking £6k plus VAT & says it has to be paid? I am confused as a couple of years ago my hubby bought a van for his business (sole trader not VAT registered) he did not pay VAT at the dealership as the first & only prior owner was not VAT registered so why is this vehicle different?

I asked the dealer if it was VAT on their profit but they said no on the whole value. Can anyone please explain this to me as it may be the decider in buying or not. Thank you

Fat_Walt

And what are similar vehicles valued at 7200?

buglawton

Challenge the dealer with a printout of this:

"Some charge VAT only on the profit they make on the sale of the car. This is known as the second-hand margin scheme, used by most car dealers. Alternatively, they can charge VAT on the total transaction cost - that is the second-hand selling price achieved. It depends on how they choose to keep their records."
https://www.google.co.uk/search?q=used+cars+vat+uk&ie=utf-8&oe=utf-8&gws_rd=cr&ei=Q3knWOn3L6DijwTfoYAI

If they don't want to play ball walk away.

interstellaflyer

I'm not sure if it's different for vehicles but all businesses pay the price including VAT, if they are VAT registered the VAT on purchases for the quarter gets taken off their total VAT when they submit their quarterly VAT return.

david_a

As I understand it once a commercial vehicle has been through the hands of a non Vat registered owner Vat cannot be charged on the purchase price of further sales.

Moody_Mare

Fat_Walt wrote: »

And what are similar vehicles valued at 7200?

They range between £5800 To £6500 with similar mileage & service history

forgotmyname

If they are £5800 elsewhere go and buy one of those instead.

Moody_Mare

forgotmyname wrote: »

If they are £5800 elsewhere go and buy one of those instead.

I would but can't get the time off work to travel unfortunately

Fat_Walt

Moody_Mare wrote: »

I would but can't get the time off work to travel unfortunately

So either travel or pay the extra £1400.

Strider590

Moody_Mare wrote: »

I am looking at buying a commercial 4x4 fits with my lifestyle I am a private buyer not business.

What does this mean?

Are you perhaps talking about a pickup? Those things that are all named after anal sex toys and driven by meat heads and short guys?

AdrianC

When a new vehicle's sold, VAT is charged.
If the buyer reclaims VAT, they have to charge it when they sell it.
<repeat>
That continues right through until it's bought by somebody who doesn't reclaim VAT. At that point, the vehicle is never VAT qualifying again.

If somebody is VAT-registered, and buys this vehicle, they'll effectively pay £6k - because they'll reclaim the VAT. Then when they sell it, they charge VAT on it.
If, though, they buy a similar vehicle that's not VAT-qualifying and advertised for £7,200 (£6,000 + 20%), they'll pay £7,200 - because they can't reclaim the VAT.
You, not being VAT reg, would pay £7,200 for either.