Should refund on personal purchase include VAT?

overload99

My brother bought a brand new VW van in 2016 and has had numerous problems with it since day one. It has been returned to the garage 21 times since he bought it. The most recent return to the garage was in January this year and it was there for 10 weeks, leaving him without transport during that time. When it was finally returned to him, it was still not fixed.

He has now written to the garage saying that as there have been faults with the van on and off since purchase, he wants to reject the vehicle and claim a full refund. The garage has come back to him saying that as he is not VAT registered, he can't claim that back.

Can anyone advise if he is entitled to a full refund. Surely if he bought a vehicle that was of unsatisfactory quality and not fit for purpose, he should be entitled to a refund of exactly what he paid for it, including the VAT?

Any advice greatly appreciated.

davidmcn

They're talking nonsense, of course if you get a refund from a retailer they're not entitled to lob the VAT off. The garage will be entitled to account for it in their VAT return.

DoaM

The above is correct. If VAT was paid on purchase then VAT is included with a refund. The garage will have accounted for the VAT in their accounts as a liability - they simply adjust the accounts to show this back as a credit; it doesn't cost them any more. They're simply trying to pull a fast one.

unholyangel

Is he sure its the vat they're saying they'll not refund?

To explain, he's not entitled to a full refund. Even if he is a consumer, you lose the right to a full refund after the first 30 days with motorvehicles. So they would be within their rights to offer a partial refund.

overload99

The man at the garage was saying that as my brother wasn't VAT registered, he (my brother) couldn't claim the VAT value back.

wesleyad

So by their logic 99% of the population can never get a full refund? Buy a TV from currys for 1200, its broken, 1000 refund? What nonsense.

Although I will add maybe this is confused slightly as this may be a B2B transaction? In which case I'm not sure if that changes things.

overload99

Not B2B no. Just a personal purchase as his family vehicle.

Supersonos

ruthieb77 wrote: »

The man at the garage was saying that as my brother wasn't VAT registered, he (my brother) couldn't claim the VAT value back.

Why are you repeating yourself?

There are several answers to your question already and here's another one: as he paid the 20% VAT when he purchased it, he will receive back the 20% VAT from the garage when they refund him.

Even someone who is VAT registered still pays VAT (and would recieve it back in the case of a refund) - it's just that they just get to claim it back from HMRC.

photome

Maybe the deduction isn’t VAT, I am thinking a full refund isn’t being offered as the van could be 3 years old

bertiewhite

Supersonos wrote: »

Why are you repeating yourself?

I guess because unholyangel asked:

unholyangel wrote: »

Is he sure its the vat they're saying they'll not refund?

so the OP confirmed what the garage said, ie:

ruthieb77 wrote: »

The man at the garage was saying that as my brother wasn't VAT registered, he (my brother) couldn't claim the VAT value back.

overload99

Thank you bertiewhite, that's exactly what I was doing.