VAT relief on adapted used car purchase

neilmcl

I recently took my dad to look at a wheelchair adapted vehicle which he liked and agreed a price to buy but during the conversation I mentioned to the salesman that my dad is entitled to VAT relief because of his disability and the fact that the car is adapted. First off the salesman said that it was nothing to do with them and my dad had to sort this out then when I pushed back saying that it;s for the dealer to sell the car minus any VAT he went on to say things like the sales doesn't have VAT, that only happens on commercial vehicles etc.

I'm sure it's a case of the sales guy not having a clue regarding disability VAT relief and how VAT is managed on used car sales in general rather than thinking we were just trying to knock some more money of the car sale. They're only a small place and this is their first experience of selling a WAV, he admitted they weren't really sure as how to price the thing in the first place and we did get it at a good price but at the end of the day if there's any VAT element on the car then this should be going to my dad, in terms of VAT relief, after all it's not the dealers money were talking about, it belongs to the HMRC.

I'll be ringing the owner on Monday but does anyone else have experience of this and how can I force them to comply with the VAT regulations, or have we got all wrong in the first place?

missile

Quite easy for a new vehicle, but no idea if you can claim VAT relief on a second hand vehicle?
I would suggest you phone HMRC first, they are quite helpful. See here

You qualify for VAT relief if>

you’re normally a wheelchair user
it’s only purchased for personal and domestic use
your vehicle has been permanently and substantially adapted to meet your requirements
you haven’t (since 1 April 2017) obtained a VAT free vehicle under this relief in the past 3 years

See here

neilmcl

There's no issue in him qualifying for relief, and he has the necessary form filled in and ready to hand over to the dealer. You're right about it being easier with a new car but as you suggest the water's are a bit muddier regarding used cars and I've not seen much helpful info on the net.

Good advice regarding HMRC, I'll get in touch with them prior to speaking to the dealer.

missile

A disabled friend of mine used to change his car every year and got more for it as a trade in than he paid after deduction of VAT.

Not any more since they changed the rules.

unforeseen

https://www.gov.uk/guidance/vat-relief-on-adapted-motor-vehicles-for-disabled-people-and-charities-notice-1002

Para 9.

Note that this is optional and the dealer doesn't have to do it.

neilmcl

unforeseen wrote: »

https://www.gov.uk/guidance/vat-relief-on-adapted-motor-vehicles-for-disabled-people-and-charities-notice-1002

Para 9.

Note that this is optional and the dealer doesn't have to do it.

No, if you read it properly, it's the VAT margin scheme that's optional, otherwise standard VAT rules apply to the transaction.

unholyangel

Firstly, are the company VAT registered? I'd expect them to be as the threshold is low but you never know.

Second, I'd say there's going to be two major issues here. If the company is small then chances are they don't have the experience or resources to check rules of VAT like zero rated for disability, so they may not be confident in any deviation from the ordinary course of business. And also, the rules you're claiming under effectively tell them they must refuse if it they know or suspect any of the declaration being untrue (ie if they have any doubt that it does qualify for zero rating).

Its one of the more clear cut areas of tax though. If they need to travel sitting in their wheelchair and are buying a vehicle that has been substantially adapted for people with those needs for their own non-business needs then zero rated.

neilmcl

unholyangel wrote: »

Firstly, are the company VAT registered? I'd expect them to be as the threshold is low but you never know.

Second, I'd say there's going to be two major issues here. If the company is small then chances are they don't have the experience or resources to check rules of VAT like zero rated for disability, so they may not be confident in any deviation from the ordinary course of business. And also, the rules you're claiming under effectively tell them they must refuse if it they know or suspect any of the declaration being untrue (ie if they have any doubt that it does qualify for zero rating).

Its one of the more clear cut areas of tax though. If they need to travel sitting in their wheelchair and are buying a vehicle that has been substantially adapted for people with those needs for their own non-business needs then zero rated.

Yes, they're VAT registered, tbh this is the first thing I checked before bringing the subject up with them.

Also, yes they are small, which is why I mentioned in my post that I believed the salesman was talking from ignorance rather than deliberately trying to mislead. I still got the impression that when I bring it up with them tomorrow they're still likely to try and push it back on me and avoid giving us the VAT relief as if asking for the reduction in VAT is somehow eating into their profit.

TBH, it would be impossible for them not to accept my dad qualifies for VAT relief given that he's an above knee amputee in a wheelchair.

esmerobbo

Don't used car traders pay VAT on their profit not the overall price of the car?

neilmcl

esmerobbo wrote: »

Don't used car traders pay VAT on their profit not the overall price of the car?

Yes, they can do, this is the VAT margin scheme, and as I mentioned above is optional. If they don't use the scheme then standard VAT rules apply.

missile

What price is this vehicle?
His profit margin is likely to be small and the VAT portion he MIGHT be able to discount will only be a portion of this. Is it worth the hassle?