trialsrider Posted August 28, 2019 Share Posted August 28, 2019 Hi there I'm in the process of buying a base van to be converted into a race van. After weeks of looking I think I've found the right van. It's a private sale so not from a dealer. Price is plus vat. How would the vat be paid in a private sale. I am a bit naive when it comes to issues of taxation and vat. The seller I believe is a business owner. Would I simply pay the whole sum in one go Inc vat ? How could I check whether the vat has been paid already and the seller is trying to get more out of me by saying vat hasn't been paid and getting an extra 20% ? The last commercial van I bought to be converted was a no vat van as the vat had already been paid. Link to comment Share on other sites More sharing options...
peterjl Posted August 28, 2019 Share Posted August 28, 2019 Hi I haven’t had to deal with vat for some years but, if he is charging vat he must have a vat registration number and be selling as part of that business, not as a private individual. To simplyfy, if you buy something with vat on it, as a private individual, and then sell it as private individual and as a one off rather than as part of a business and you are not registered, you cannot charge vat. Also, in my day, HMRC vat had a help line ( 0300 200 3700) which I had to use because it can be very complicated, try giving them a call, they can also tell you if registration number is valid. Also, is the van registered to the vat registered business or to an individual? Again ask vat helpline Hope that helps Peter Link to comment Share on other sites More sharing options...
colin Posted August 28, 2019 Share Posted August 28, 2019 Does it matter? You are buying a van, you just look at the total price, if it's acceptable you pay. Many commercial vans are sold secondhand as plus vat, it would depend on how it was purchased in the first place. Link to comment Share on other sites More sharing options...
Keithl Posted August 28, 2019 Share Posted August 28, 2019 colin - 2019-08-28 8:21 PM Does it matter? Yes it does! It makes a 20% increase in the price! The seller can only charge VAT if he is VAT registered and passes on the tax collected to HMRC. Just because he was charged VAT when he purchased the van does not mean he can charge VAT when he sells it. In Gareth's case it seems that the 'Private seller' may actually be a business selling the 'Company' van and hence charging VAT. If it is a genuine private seller then they cannot charge VAT. If this really is the 'Company' van then you must receive a full VAT receipt detailing the name and address of the seller, the price paid, the amount of VAT paid and, most importantly the VAT registration number of the seller. If they refuse to supply a VAT receipt then contact HMRC. Gareth, if in doubt I would follow Peter's advice and phone the help line. Keith. Link to comment Share on other sites More sharing options...
TeamRienza Posted August 28, 2019 Share Posted August 28, 2019 Would I be correct in thinking that if VAT is charged, implying that the seller is a business, then certain protections are provided in law including a period of warranty? On the other hand, what is the meaning of those silly adverts by businesses which indicate that an item (usually kitchens and bathroom suites in my experience) is VAT free. I assume that really the price is reduced by an amount to equal the VAT charge, since the business must be liable to pay the VAT.? Perhaps you should offer to pay ‘cash in hand’ if the VAT is removed as seems to happen in the grey economy. Assuming the van is in good order etc. Davy Link to comment Share on other sites More sharing options...
colin Posted August 28, 2019 Share Posted August 28, 2019 Keithl - 2019-08-28 8:43 PM colin - 2019-08-28 8:21 PM Does it matter? Yes it does! It makes a 20% increase in the price! The seller can only charge VAT if he is VAT registered and passes on the tax collected to HMRC. Just because he was charged VAT when he purchased the van does not mean he can charge VAT when he sells it. In Gareth's case it seems that the 'Private seller' may actually be a business selling the 'Company' van and hence charging VAT. If it is a genuine private seller then they cannot charge VAT. If this really is the 'Company' van then you must receive a full VAT receipt detailing the name and address of the seller, the price paid, the amount of VAT paid and, most importantly the VAT registration number of the seller. If they refuse to supply a VAT receipt then contact HMRC. Gareth, if in doubt I would follow Peter's advice and phone the help line. Keith. It makes no differance if you buy a vehicle secondhand if you just look at the total price, i.e. tell me what is the most expensive, a private van sold for £1200 or a business van sold as £1000 + 20% vat which is what I posted, not the edited quote you have used. Link to comment Share on other sites More sharing options...
trialsrider Posted August 28, 2019 Author Share Posted August 28, 2019 peterjl - 2019-08-28 8:11 PM Hi I haven’t had to deal with vat for some years but, if he is charging vat he must have a vat registration number and be selling as part of that business, not as a private individual. To simplyfy, if you buy something with vat on it, as a private individual, and then sell it as private individual and as a one off rather than as part of a business and you are not registered, you cannot charge vat. Also, in my day, HMRC vat had a help line ( 0300 200 3700) which I had to use because it can be very complicated, try giving them a call, they can also tell you if registration number is valid. Also, is the van registered to the vat registered business or to an individual? Again ask vat helpline Hope that helps Peter Thanks for the advice. I will contact them tomorrow. Link to comment Share on other sites More sharing options...
Keithl Posted August 28, 2019 Share Posted August 28, 2019 colin - 2019-08-28 9:10 PM Keithl - 2019-08-28 8:43 PM colin - 2019-08-28 8:21 PM Does it matter? Yes it does! It makes a 20% increase in the price! The seller can only charge VAT if he is VAT registered and passes on the tax collected to HMRC. Just because he was charged VAT when he purchased the van does not mean he can charge VAT when he sells it. In Gareth's case it seems that the 'Private seller' may actually be a business selling the 'Company' van and hence charging VAT. If it is a genuine private seller then they cannot charge VAT. If this really is the 'Company' van then you must receive a full VAT receipt detailing the name and address of the seller, the price paid, the amount of VAT paid and, most importantly the VAT registration number of the seller. If they refuse to supply a VAT receipt then contact HMRC. Gareth, if in doubt I would follow Peter's advice and phone the help line. Keith. It makes no differance if you buy a vehicle secondhand if you just look at the total price, i.e. tell me what is the most expensive, a private van sold for £1200 or a business van sold as £1000 + 20% vat which is what I posted, not the edited quote you have used. OK, Sorry if I edited out your point but I was trying to explain the OP's question where he was buying a van at a set price which was then (potentially) being subjected to VAT, hence the price suddenly being inflated by 20%. In his case this would make a big difference! Keith. Link to comment Share on other sites More sharing options...
Derek Uzzell Posted August 29, 2019 Share Posted August 29, 2019 There is plenty of on-line information about this https://tinyurl.com/yyehjhfz If the van Gareth is considering buying were to be used by him for business purposes, there would be the potential for him to reclaim the VAT element of the vehicle’s asking-price. But as the vehicle will be converted into a ‘race van’ (presumably) the ‘racing’ will be a leisure activity not a business. The price Gareth pays will be the “whole sum” (ie. including the stated VAT element). Link to comment Share on other sites More sharing options...
Will86 Posted August 29, 2019 Share Posted August 29, 2019 Its quite simple If a VAT registered person sells an asset then he is obliged to add VAT regardless of who buys it. If a VAT registered person buys it then he can claim the VAT back on his return form to his VAT office. If a non VAT registered person buys it he simply pays what is asked. It appears that your seller is politely explaining what he is by law obliged to do. Link to comment Share on other sites More sharing options...
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