Vat on selling farm pickup

JohnDeere8530 · Jul 22, 2023

My vat registered farming business bought a second hand pickup from a vat registered dealer a few years ago and never reclaimed the vat as it wasn’t a vat qualifying vehicle

I now want to sell it at a loss. Do I have to charge any vat on it ? I’m thinking not, but not 100% sure

Clive · Jul 22, 2023

vat has already been paid if not vat q when you bought so sell it without vat just as you would sell an none commercial

Still Farming · Jul 22, 2023

If not a vat qualifying vehicle then not possibly?
What made it NOT qualifying?

Nearly · Jul 22, 2023

When is a pickup non-commercial and non-vat qualifying?
Ask your accountant about the invoice?

robs1 · Jul 22, 2023

JohnDeere8530 said:
My vat registered farming business bought a second hand pickup from a vat registered dealer a few years ago and never reclaimed the vat as it wasn’t a vat qualifying vehicle

I now want to sell it at a loss. Do I have to charge any vat on it ? I’m thinking not, but not 100% sure

Aren't dealers meant to charge vat on the difference between buying and selling price ? If it's not a vat qualifying vehicle then I wouldn't be charging vatt

Still Farming · Jul 22, 2023

Nearly said:
When is a pickup non-commercial and non-vat qualifying?
Ask your accountant about the invoice?

Unless domestic use only?

Clive · Jul 22, 2023

Still Farming said:
If not a vat qualifying vehicle then not possibly?
What made it NOT qualifying?

if any previous buyer wasn’t vat registered (private buyer or business below vat threshold) they wouldn’t have been able to reclaim so will have paid the vat

JohnDeere8530 · Jul 22, 2023

Yes they can use second hand margin scheme
They probably did. However I didn’t reclaim this

JohnDeere8530 · Jul 22, 2023

Clive said:
if first buyer wasn’t vat registered they wouldn’t have been able to reclaim so will have paid the vat

Not all vehicles are qualifying. Esp if owned by a private person beforehand

Still Farming · Jul 22, 2023

JohnDeere8530 said:
Not all vehicles are qualifying. Esp if owned by a private person beforehand

Must be hard to get insured if private domestic as every quote I ever had for a pick up it was commercial policy only??

Clive · Jul 22, 2023

JohnDeere8530 said:
Not all vehicles are qualifying. Esp if owned by a private person beforehand

not that simple !

in this case it sounds like the pickup may have been vat q but a previous owner was unable to reclaim so paid it meaning it was no longer vat quallifying

btw it’s not the vehicle that is vat qualifying … it is the use.of the vehicle that determines

ie a car bought for sole use as a taxi, hire car or driving school for example can be vat qualifying

i rent a unit to a company that quite legitimately reclaims vat on several ferrari, lamborghini, astons, mclarens and porsches etc when new and qualifying - they run a supercar experience day company and the cars are exclusively hire and reward

once vat is paid by any owner but not reclaimed the vehicle looses its qualifying status so a private previous owner will have lost this pickups qualifying status

robs1 · Jul 22, 2023

Clive said:
not that simple !

in this case it sounds like the pickup may have been vat q but a previous owner was unable to reclaim so paid it meaning it was no longer vat quallifying

btw it’s not the vehicle that is vat qualifying … it is the use.of the vehicle that determines

ie a car bought for sole use as a taxi, hire car or driving school for example would be vat qualifying

i rent a unit to a company that quite legitimately reclaims vat on several ferrari, lamborghini, astons, mclarens and porsches etc - they run a supercar experience day company and the cars are exclusively hire and reward

If the vehicle is liable for vat and a vat registered business sells it then vat has to be added, it makes no difference if vat wasn't paid on its purchase

Clive · Jul 22, 2023

robs1 said:
If the vehicle is liable for vat and a vat registered business sells it then vat has to be added, it makes no difference if vat wasn't paid on its purchase

wrong, not if vat has previously been paid and not reclaimed.

vat would always have been paid on ANY vehicle, what subsequently matters is if anyone was able (due to use) be able to reclaim that vat - ie it’s ever had a previous private none vat registered owner as sounds like the case with this pickup

to the op - check with your accountant please , tff is a nightmare for accountancy misinformation that could land you in prison !

robs1 · Jul 22, 2023

Clive said:
wrong, not if vat has previously been paid and not reclaimed - ie it’s ever had a previous private none vat register owner

to the op - check with your accountant please , tff is a nightmare for accountancy misinformation that could land you in prison !

I just looked it up on the HMRC site, go through the pages and it says you have to charge full vat on full selling price

VAT when you sell a vehicle

VAT for motor dealers and members of the motor trade - work out what VAT to charge when you sell a vehicle.

www.gov.uk

Clive · Jul 22, 2023

robs1 said:
I just looked it up on the HMRC site, go through the pages and it says you have to charge full vat on full selling price

VAT when you sell a vehicle

VAT for motor dealers and members of the motor trade - work out what VAT to charge when you sell a vehicle.

www.gov.uk

read it again - the op says this pickup is no longer vat qualified - a previous owner didn’t reclaim

then have a chat with your account

assuming he does sell it for a profit anyway ….

robs1 · Jul 22, 2023

Clive said:
read it again - the op says this pickup is no longer vat qualified - a previous owner didn’t reclaim

then have a chat with your account

He said he didn't claim the vat back as it wasn't vat qualifying when HE bought it, that could be because the previous owner was not vat registered so could not charge it to the dealer, if the op used it in his vat registered business he has to charge vat on a commercial business, exactly the same if a tractor was bought from a non vat registered business by a vat registered one and they later sold it on, the only way the pick up is not liable to vat is if it isnt a commercial vehicle

Pennine Ploughing · Jul 22, 2023

If it was bought with no vat on purchase price on plus vat it don't matter,
However when selling if at anytime while in your ownership, it was run as a business vehicle, or had vat reclaimed for parts, fuel etc, them vat is chargeable on the sale price

Clive · Jul 22, 2023

robs1 said:
He said he didn't claim the vat back as it wasn't vat qualifying when HE bought it, that could be because the previous owner was not vat registered so could not charge it to the dealer, if the op used it in his vat registered business he has to charge vat on a commercial business, exactly the same if a tractor was bought from a non vat registered business by a vat registered one and they later sold it on, the only way the pick up is not liable to vat is if it isnt a commercial vehicle

sorry, i disagree ……… unless he’s selling it at a profit

Using the VAT margin scheme for second-hand vehicles

Find out how to use a margin scheme to account for VAT if you buy or sell second-hand vehicles (VAT Notice 718/1).

www.gov.uk

check with an accountant

robs1 · Jul 22, 2023

Clive said:
sorry, i disagree

check with an accountant

Why ? it's not my vehicle, I just answered his question after checking on the HMRC website, ask your accountant and let us know,

Clive · Jul 22, 2023

robs1 said:
Why ? it's not my vehicle, I just answered his question after checking on the HMRC website, ask your accountant and let us know,

Using the VAT margin scheme for second-hand vehicles

Find out how to use a margin scheme to account for VAT if you buy or sell second-hand vehicles (VAT Notice 718/1).

www.gov.uk

i have sold (after checking with my accountant) in similar situations more than once in the past

Vat on selling farm pickup

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