A VAT question

medalto

 its about agricultural equipment , not cars but i cant find anywhere else to ask . And its about VAT

Im trading in my quadbike for a new one . Weve agreed a price of  £2200 fo rthe old one. The new one is  (~)£5000 ex VAT

So how is that VAT calculated : Is it on (5000-2200)  so I pay £2800 + (VAT on 2800)  or is it  VAT on £5000 , and I end up paying £2800+ (VAT on £5000)

thanks for any information and anything i can point the dealer to  in case we disagree

bigadaj

If it's quoted as ex vat then you'd expect the vat on the £5k, so you'd pay £6k minus your trade in. You'd then claim the VAT back to reclaim the £1000.

CvPiper

You will be paying £5000 plus VAT (£6000). The £5000 you pay is made up of £2200 trade in and £2800 cash. Total Payable £3800 but will reclaim £1000 if you are VAT registered. 

Is you part exchange vat applicable? I.e. owned by business, and vat paid on purchase?

Sandtree

VAT is paid on the purchase price of £5,000; the fact your not paying just cash is irrelevant 

AdrianC

Is your old quad VAT qualifying?
Are you buying as a VAT-reg purchaser for business use?

You are paying £5k+VAT = £6k inc VAT for the new one.
Against that £6k, you are getting £2.2k for the old one, if it isn't VAT-qual. Balance = £3.8k. If you're VAT reg, you can reclaim £1k of that.
If the old one is VAT-qual, then you'll get £2.2k+VAT back. Balance = £3.4k. You can reclaim £600 of that.