Vat On A Trade-in

[Lazy Sod]

If I were to trade in a machine with a dealer, as I'm no longer vat registered, would it be in order to just be just charged vat on the balance payable?

 

[Lincsman]

If I were to trade in a machine with a dealer, as I'm no longer vat registered, would it be in order to just be just charged vat on the balance payable?

Probably, as they could pay you £1 for yours and you pay the difference + Vat, but can mess their paperwork up and show paper losses, ask them.

 

[farmerdan7618]

If I were to trade in a machine with a dealer, as I'm no longer vat registered, would it be in order to just be just charged vat on the balance payable?

No, VAT at 20% to be charged on the purchase price of the new machine in full.

No VAT on the trade in, that should have been dealt with when you de-registered.

 

[Johnnyboxer]

No, VAT at 20% to be charged on the purchase price of the new machine in full.

No VAT on the trade in, that should have been dealt with when you de-registered.

This [emoji106] ^^^^^

no vat on your trade in
You have to pay the full 20% vat on the new goods

 

[Exfarmer]

If the dealer gives you an invoice for new machine 20,000
Less Trade in 10,000
Balance to pay 10,000 + 20% so 12,000 inc Vat

 

[sledgeit]

If the dealer gives you an invoice for new machine 20,000
Less Trade in 10,000
Balance to pay 10,000 + 20% so 12,000 inc Vat

I could be wrong but I think you should pay vat on the full purchase price

 

[TomD]

If the dealer gives you an invoice for new machine 20,000
Less Trade in 10,000
Balance to pay 10,000 + 20% so 12,000 inc Vat

You pay vat on the goods not the balance to change

 

[Exfarmer]

You pay vat on the goods not the balance to change

You pay Vat on the price charged by the dealer.
Remember he is making a margin and that margin may be greater than your trade in.
So if you buy a 20,000 pound machine and get paid 2,000 grand for your trade in , you may very often be only be getting a discount on new.
He will then sell the trade in for X plus 20% so the VAT come back into the system

 

[Dealer]

You pay Vat on the price charged by the dealer.
Remember he is making a margin and that margin may be greater than your trade in.
So if you buy a 20,000 pound machine and get paid 2,000 grand for your trade in , you may very often be only be getting a discount on new.
He will then sell the trade in for X plus 20% so the VAT come back into the system

Wrong

Dealer will sell the trade in under the vat margin scheme

He will not charge vat on full selling price as he only has to pay vat on the profit.

So if he pays 10k with no vat & sells for 12k no vat from purchaser.
Vat will £400 paid to hmrc he is left with £1600 profit.

Exactly the same as used cars.

 

[jackp]

Wrong

Dealer will sell the trade in under the vat margin scheme

He will not charge vat on full selling price as he only has to pay vat on the profit.

So if he pays 10k with no vat & sells for 12k no vat from purchaser.
Vat will £400 paid to hmrc he is left with £1600 profit.

Exactly the same as used cars

 

[jackp]

Wrong not the same as used cars

 

[Dealer]

If I were to trade in a machine with a dealer, as I'm no longer vat registered, would it be in order to just be just charged vat on the balance payable?

No

selling price plus vat

Less allowance for trade in = amount of money due to dealer.

 

[Dealer]

Wrong not the same as used cars

Yes it is used cars if not vat qualifying are sold under the margin scheme for vat.

No vat is shown on the selling invoice but the dealer if vat registered is liable for vat on the profit.

[Withdrawn] The Margin Scheme on second-hand cars and other vehicles (VAT Notice 718/1)

How the Margin Scheme works and when you can use it for sales of second-hand vehicles.

www.gov.uk

 

[Johnnyboxer]

If the dealer gives you an invoice for new machine 20,000
Less Trade in 10,000
Balance to pay 10,000 + 20% so 12,000 inc Vat

Nope
New machine £20k plus vat £4000 = £24000

P/Ex of of machine £10000 (no vat can be charged by you, as you are not vat registered anymore)

Balance due £14000, from you

 

[Tractorstant]

If the dealer gives you an invoice for new machine 20,000
Less Trade in 10,000
Balance to pay 10,000 + 20% so 12,000 inc Vat

Not unless you are committing VAT fraud!!!

 

[Tractorstant]

You pay Vat on the price charged by the dealer.
Remember he is making a margin and that margin may be greater than your trade in.
So if you buy a 20,000 pound machine and get paid 2,000 grand for your trade in , you may very often be only be getting a discount on new.
He will then sell the trade in for X plus 20% so the VAT come back into the system

The Margin scheme will mean that if the dealer undervalues the trade-in then he will be paying VAT on Margin.

 

[Exfarmer]

Not unless you are committing VAT fraud!!!

I may be wrong, but I dont commit fraud

 

[Tractorstant]

I may be wrong, but I dont commit fraud

No implication! You are free to go Sir.

 

[jackp]

Yes it is used cars if not vat qualifying are sold under the margin scheme for vat.

No vat is shown on the selling invoice but the dealer if vat registered is liable for vat on the profit.

[Withdrawn] The Margin Scheme on second-hand cars and other vehicles (VAT Notice 718/1)

How the Margin Scheme works and when you can use it for sales of second-hand vehicles.

www.gov.uk

Yes the margin scheme is used for cars but not tractors, plant and machinery

 

[Lincsman]

Whenever I have bought a machine the dealer will skew the figures to suit.... within limits. (not usually allowed to show a paper loss on a new machine)

Change cost £50k;

EG 1
new = £100k + 20K vat = 120K
Trade in =50k

So I write cheque for 70k inc paid 20K in vat unclaimed

EG2
New = 60K + 12K vat = 72K
Trade in = 10K

Cheque = 62K inc paid 12K in vat unclaimed