Buying Company Van

Primeh

Hello, I'm hoping someone might be able to give me some advice

My friend has a Ford Transit he was leasing from Ford.on a finance lease. When the term ended he paid a balloon payment and now pays them £125 a year peppercorn to keep the van. 

He ordered a new one for his business through a different lease company and his keen to get rid of this one.

He went to WeBuyAnyVan and they offered him £5750 which is quiet a low price. I told him I would like to buy it from him for personal use and he said he would like too but his paperwork means he has to sell it to a Vat registered ltd company.

I dont have one of these but another builder friend of mine does and has offered to help me.to buy it. 

My question is can my friend buy it for his company and then sell it on to me easily? If he bought it for say £5000 and then sold it onto me for £5000 in a month would that cause him any problems?

Thanks

Primeh

To save things Getting complicated by friend wouldn't be reclaiming any of the vat on the purchase of the van , so I assume that when he comes to sell it that it's just a simple £5000 out and £5000 in on his books?

Jeremy535897

Who is it that requires him to sell the van to a VAT registered limited company?

Primeh

He bought it from ford lease who are run by a compy called ALD finance. 
I thought he must have been mistaken when he first explained this to me but I've called them on several occasions asking different people, just to confirm they are all saying the same thing and unfortunately they are. 
Apparently it is written into the contract when you take the original lease with them

Jeremy535897

Your builder friend would be paying VAT on the purchase of the van, and would then either not reclaim the VAT, on the basis that it was not a business expense, or he would reclaim it and charge you VAT when he sold it to you (if your builder friend has a limited company that would buy the van, this is what would need to happen).

DullGreyGuy

Primeh said:

He bought it from ford lease who are run by a compy called ALD finance. 
I thought he must have been mistaken when he first explained this to me but I've called them on several occasions asking different people, just to confirm they are all saying the same thing and unfortunately they are. 
Apparently it is written into the contract when you take the original lease with them

There may be a requirement from ALD that they themselves sell it to a VAT company... a seller can use any criteria they want to limit who they want as a customer as long as they arent protected characteristics (race, sexual orientation etc). Once your friends company owns the van it would be exceptionally odd for them to have a restriction on who they can onward sell it to, difficult for ALD to track it and enforce such conditions. 

Sounds more like wrong end of the stick 

Primeh

Jeremy535897 said:

Your builder friend would be paying VAT on the purchase of the van, and would then either not reclaim the VAT, on the basis that it was not a business expense, or he would reclaim it and charge you VAT when he sold it to you (if your builder friend has a limited company that would buy the van, this is what would need to happen).

Thank you, so he has a limited company which is vat registered, so he would have to buy the van and then reclaim the vat is that correct and then charge me when he sells it at a later date?
He can't just buy it including vat for £5000 , not reclaim the vat and sell it on at a later date for the £5000 including vat?

Primeh

DullGreyGuy said:

Primeh said:

He bought it from ford lease who are run by a compy called ALD finance. 
I thought he must have been mistaken when he first explained this to me but I've called them on several occasions asking different people, just to confirm they are all saying the same thing and unfortunately they are. 
Apparently it is written into the contract when you take the original lease with them

There may be a requirement from ALD that they themselves sell it to a VAT company... a seller can use any criteria they want to limit who they want as a customer as long as they arent protected characteristics (race, sexual orientation etc). Once your friends company owns the van it would be exceptionally odd for them to have a restriction on who they can onward sell it to, difficult for ALD to track it and enforce such conditions. 

Sounds more like wrong end of the stick 

Thank you, you are right I've just confirmed this with ald and once they have sold it they don't care 🥳

DullGreyGuy

Primeh said:

Jeremy535897 said:

Your builder friend would be paying VAT on the purchase of the van, and would then either not reclaim the VAT, on the basis that it was not a business expense, or he would reclaim it and charge you VAT when he sold it to you (if your builder friend has a limited company that would buy the van, this is what would need to happen).

Thank you, so he has a limited company which is vat registered, so he would have to buy the van and then reclaim the vat is that correct and then charge me when he sells it at a later date?
He can't just buy it including vat for £5000 , not reclaim the vat and sell it on at a later date for the £5000 including vat?

The net impact is the same £5,000 minus VAT plus VAT is £5,000 unless VAT rate changes between them buying it and selling it to you. 

The correct route would be for the business to buy it therefore reclaim the VAT and then charge you VAT on sale. Presumably they are just going to sell it to you at cost so £5k