VAT on a used tractor.

[Exfarmer]

I do not believe that to be correct. It would be exempt. If the last owner was not VAT registered and did not claim it back, that's the consumer tax done and dusted.

I am sorry but I totally disagree. To follow this advice could be putting you in a difficult position down the line If it was judged that you should have charged VAT and thus 16.66% of the sale price is due to the revenue.
remember even if you speak to the VAT office , they will not guarantee their advice is always correct and you certainly do not want to be fighting this out in the court

 

[Cowabunga]

I am sorry but I totally disagree. To follow this advice could be putting you in a difficult position down the line If it was judged that you should have charged VAT and thus 16.66% of the sale price is due to the revenue.
remember even if you speak to the VAT office , they will not guarantee their advice is always correct and you certainly do not want to be fighting this out in the court

If the previous owner misrepresented his tax position, than it would be him in the doo-doo. The tax is discharged if not reclaimed by the previous owner, that's a fact.

 

[Robt]

Any body who is VAT registered must harge VAT on sales unless they are a car dealer and can charge VAT on margin

depends if they claimed the VAT after buying ti originally

 

[Exfarmer]

If the previous owner misrepresented his tax position, than it would be him in the doo-doo. The tax is discharged if not reclaimed by the previous owner, that's a fact.

Why has it got anything to do with the previous owner? If they did not give you a VAT invoice then you cant claim the VAT back nor Will he pay it to the revenue.
the fact is If you are selling a product which carries VAT , then you must charge it, no matter its history

 

[farmerdan7618]

Here is what HMRC have to say for avoidance of doubt. VAT margin scheme is available on a profit made as long as input VAT was not reclaimed. Does not need to be shown on an invoice, and the next purchaser cannot reclaim it.

It is optional, and 20% on the full price is the other option, this can be reclaimed by the buyer.

 

[grainboy]

Once again, a little knowledge is dangerous !!

 

[Highland Mule]

Here is what HMRC have to say for avoidance of doubt. VAT margin scheme is available on a profit made as long as input VAT was not reclaimed. Does not need to be shown on an invoice, and the next purchaser cannot reclaim it.

It is optional, and 20% on the full price is the other option, this can be reclaimed by the buyer.

Thankyou. That’s what I’ve been writing above. If no profit, no need to account for vat, if some profit, account on margin scheme if you wish.

 

[Phil P]

Why has it got anything to do with the previous owner? If they did not give you a VAT invoice then you cant claim the VAT back nor Will he pay it to the revenue.
the fact is If you are selling a product which carries VAT , then you must charge it, no matter its history

If the vat has been paid on an item and not reclaimed then it doesn’t need to be changed again, neither can it be reclaimed.

 

[Kidds]

So what happens (hypothetically) if a farm was to sell a vintage tractor that was bought say in the 1960's, before Vat , and was now worth £5000, six times the purchased price. Vat or not on the sale.

In the above example in my experience VAT is charged on the sale.

 

[Exfarmer]

If the vat has been paid on an item and not reclaimed then it doesn’t need to be changed again, neither can it be reclaimed.

no this is wrong, if you are VAT registered and you sell anything which is vatable then you must charge it. If you are a dealer then you can just charge on the margin. However VAT on the margin is not reclaimable so is aimed at dealers selling into the private sector.

 

[Cowabunga]

Why has it got anything to do with the previous owner? If they did not give you a VAT invoice then you cant claim the VAT back nor Will he pay it to the revenue.
the fact is If you are selling a product which carries VAT , then you must charge it, no matter its history

No. If the VAT owed has been paid to the exchequer and not reclaimed then no more VAT will be due or chargeable on that item. Although, as you say, if resold for a profit then VAT is chargeable on the margin made but included not as a seperate itemised charge on the customer's invoice.

 

[Exfarmer]

No. If the VAT owed has been paid to the excheqor and not reclaimed then no more VAT will be due or chargeable on that item.

I dont agree and think anyone following this advice could find them selves in a difficult position

 

[Cowabunga]

I dont agree and think anyone following this advice could find them selves in a difficult position

Well I do not believe they would. This is precisely the reason that some pickups bought by non-VAT registered customers will henceforth not be resold with VAT charged. No matter what the product, which is irrelevant; what matters is its VAT status at the time.

 

[Wombat]

I dont agree and think anyone following this advice could find them selves in a difficult position

We bought a piece of machinery off a well known Agri dealer and it was sold with no Vat as it was used by a small shoot that weren’t vat registered when bought then traded in. When I bought it from the the dealer they didn’t charge vat to me on it

 

[Robt]

Why has it got anything to do with the previous owner? If they did not give you a VAT invoice then you cant claim the VAT back nor Will he pay it to the revenue.
the fact is If you are selling a product which carries VAT , then you must charge it, no matter its history

Sorry but you arent qualified or indeed fully up to speed with Vat rules so please dont get arsey when other know more than you

 

[Shebb90]

Just looking for a bit of advice on this. I’m looking at a used tractor 20 years old, to use at a stables. I’m not VAT registered. Is the VAT 20% on the tractor.
So if the cost was £4000
The total including VAT would be £4800

Thanks

This is right you would pay £800 vat but wouldn't be able to claim it back whilst the the seller would have to pay back the vat so would still only end up with the £4000 in the end. Not so good for you tho. If you can find a none vat tractor it would work better for you.

 

[Tomtrac]

Regarding the original question
If you are not vat registered and buying off a dealer ask him if you can split vat
ie he makes a receipt for say ! if tractor asking price £5000 so it would be £5000 plus £1000 vat £6000 so ask for an invoice or £5500 you save 500 and he makes invoice for £4583.33 pluss £916.66 vat total £5499.99 so you have only paid 500 vat and he has given u a 500 discount if he can a ford it

I have had a few vat inspections etc
In my experience if you didnt pay vat when buying something it is not vatable so you dont charge vat on it
Its like if you do a septic tank for a house you do not charge vat on it regardless if you are vat registered or not
And there are a lot off things not vat-able ie hay straw etc you are vat registered but dont charge vat on all sales

 

[Tibbo]

This is right you would pay £800 vat but wouldn't be able to claim it back whilst the the seller would have to pay back the vat so would still only end up with the £4000 in the end. Not so good for you tho. If you can find a none vat tractor it would work better for you.

I went in to the deal knowing I would be paying the VAT so I happy with that. I just wanted to know I was paying right as it was purchased off eBay. I’m expecting an invoice with the VAT on

 

[Tibbo]

Regarding the original question
If you are not vat registered and buying off a dealer ask him if you can split vat
ie he makes a receipt for say ! if tractor asking price £5000 so it would be £5000 plus £1000 vat £6000 so ask for an invoice or £5500 you save 500 and he makes invoice for £4583.33 pluss £916.66 vat total £5499.99 so you have only paid 500 vat and he has given u a 500 discount if he can a ford it

I have had a few vat inspections etc
In my experience if you didnt pay vat when buying something it is not vatable so you dont charge vat on it
Its like if you do a septic tank for a house you do not charge vat on it regardless if you are vat registered or not
And there are a lot off things not vat-able ie hay straw etc you are vat registered but dont charge vat on all sales

I already came to a deal with this and I wouldn’t be pushing anymore then I already have but duly noted for next time

 

[Johnnyboxer]

Sorry, but I checked at the time and again today. Under the vat margin scheme, I don’t need to charge any vat.

Edit, obviously I would if I made a profit, under the margin scheme, but my experience was of a depreciating asset.

You generally have to be a motor or art dealer to participate in the vat margin scheme