VAT - private buyer

CalieWaters

As a saver I tend to hold onto my car for quite some time to save on depreciation. I thought as a treat I will look into getting a new car, it has been 5 years since I have purchased a new vehicle but to my surprise the order has VAT.  I have not signed for this as yet, I have looked into this and understand private sellers don't charge VAT which is quite tempting to buy from a private seller.

I was under the impression that the VAT was not in the advertised web price yet on the invoice but it has came to light it is a warranty on the invoice and not the VAT which I declined the warranty, thanks to other savers on the site that have pointed this out and in a call with the dealership.  However it is most confusing putting a warranty on an order when you don't wish to have a warranty.

Ayr_Rage

Yes, you have to pay VAT on a car from a dealer.

The advertised price includes VAT, you just didn't look into it closely enough.

No, you cannot claim anything back.

Mildly_Miffed

When a vehicle is sold new, VAT is charged. Always. Same as everything else you buy, bar the relatively few things that are 0% VAT like food. The price is just usually listed as VAT inclusive. For anything sold primarily to consumers, a price listed has to be VAT inclusive...
https://www.asa.org.uk/advice-online/compulsory-costs-and-charges-vat.html

But, if the vendor can say their primary customer for that product is a business purchaser, then they can list a VAT exclusive price so long as it's stated as such, even in small print. For a new vehicle, it's much more credible for them to state that for a big pickup than it is for a fast coupe. So... what are we talking about?

For you, a private buyer, you pay the VAT and that's the end of it.

But if a business buyer buys it for business purposes, they reclaim the VAT - and charge it again on resale. Same as any other VATable business purchase, from stationery to computers to furniture to widgets.
If another business buyer buys it (but now used) for business purposes, the same applies.

This continues throughout the vehicle's life, until it's bought by a private buyer, who just pays the VAT and can't reclaim it, so then doesn't recharge it.
If a business buys it thereafter, there's no VAT to reclaim, so they don't recharge it.

For you to buy that vehicle, just read the price as +20% - that's what you pay, same as a non-VAT-qual one.
For a business, though, a VAT qualifying vehicle is more tempting than one that's not.

QrizB

CalieWaters said:

.   to my surprise the order has VAT on yet the web advert does not making the cash price of the vehicle appear low than it actually is.

Can you post a screenshot of this advert, or share a link?

Ads for commercial vehicles usually state "+VAT" but it's not always as conspicuous as the headline price.

CalieWaters

Thanks upon further checks it a warranty, busy day as had to travel a long way to the garage with my 7 year old.  However when the warranty was declined at the point of sale its still confusing putting it on an invoice and creating a higher end price on the document, the dealer did explain it would be on the document, but I didn't want add on after add on and wanted confidence that would have been removed.  I have pulled out of the sale on gone elsewhere.

Ectophile

CalieWaters said:

Thanks upon further checks it a warranty, busy day as had to travel a long way to the garage with my 7 year old.  However when the warranty was declined at the point of sale its still confusing putting it on an invoice and creating a higher end price on the document, the dealer did explain it would be on the document, but I didn't want add on after add on and wanted confidence that would have been removed.  I have pulled out of the sale on gone elsewhere.

The dealer will get a commission on every warranty they sell.  So of course they are going to add the warranty as standard.