 | Home > General & Technical (L663) > Commercial Variant |
 
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| Farmerben Member Since: 16 Jan 2017 Location: Herefordshire Posts: 605   
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Wondering which one of us will stop dithering and order one first..... https://instagram.com/bentheoandrews |
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17th Mar 2021 7:46pm |
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| walfy Member Since: 29 Aug 2007 Location: Frome Posts: 2661 
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VAT registered companies can buy vehicles from private sellers, but upon resale they are liable for the VAT.
I got caught out with this. I purchased a quad bike when I was a sole trader before going Ltd. As I intended doing quad instruction. That all fell through and I sold the quad after becoming a VAT registered Ltd company. Had the pay VAT on the sale price of the quad despite not claiming the VAT back in the first place. Won't be making that mistake again. 110 D250 SE HT 110 USW SOLD RRE HSE Dynamic Gone, wife killed it VOLVO XC60 R Dynamic with some toys Polaris RZR 900XP SOLD |
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18th Mar 2021 2:51pm |
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| camelman Member Since: 27 Feb 2013 Location: Peak District Posts: 3373
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Walfy: You should only have had to pay the VAT on any profit you made under the margin scheme if you werent charged VAT in the first place.
https://www.gov.uk/guidance/the-margin-sch...otice-7181 2. The Margin Scheme on second-hand cars and other vehicles 2.1 How the Margin Scheme works If you sell second-hand vehicles on which you were not charged VAT, using the Margin Scheme will save you money. Without the Margin Scheme, you would have to account for VAT on the full selling price of each vehicle. But, if you use the Margin Scheme, you can account for VAT on the difference between the price you pay for a second-hand vehicle and the price you sell it for. If you sell a vehicle for less than you paid for it, you will not have to account for any VAT on the sale.  |
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18th Mar 2021 2:58pm |
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| AndrewS Member Since: 10 Apr 2007 Location: Hereford Posts: 3708 
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Only if the item is a vat qualifying. A car won't qualify. 130's have feeling's as well you know  |
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18th Mar 2021 4:02pm |
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| camelman Member Since: 27 Feb 2013 Location: Peak District Posts: 3373
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Unfortunately they do.
If a dealer (or a company for that matter) buys a car from a private individual for £10k and sells it for £12k, they have to pay VAT on the £2k. Detail is included in the link I posted above about the margin scheme. |
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18th Mar 2021 4:05pm |
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| walfy Member Since: 29 Aug 2007 Location: Frome Posts: 2661
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Thats how I got caught out with the quad. Purchased from a dealer as a non VAT sole trader. Converted to Ltd and absorbed the quad onto company stock. When I sold it, I had to charge VAT and pay HMRC.
It's an easy way to get a non VAT claimed commercial vehicle back into the VAT system. 110 D250 SE HT 110 USW SOLD RRE HSE Dynamic Gone, wife killed it VOLVO XC60 R Dynamic with some toys Polaris RZR 900XP SOLD |
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18th Mar 2021 4:10pm |
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| camelman Member Since: 27 Feb 2013 Location: Peak District Posts: 3373
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Ahh, that explains it, bumma!
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18th Mar 2021 4:13pm |
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| TRGRichie Member Since: 03 Mar 2021 Location: Yorkshire Posts: 180
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sorry if i'm asking stupid questions,
but here goes, is the defender 90 hardtop really a commercial vehicle? by this i mean what does the hmrc class it as? does anyone know what codes these carry for hmrc purposes? i'm just in the process of (hopefully) buying one for my company but i'll also be using it for private use and i need to be sure it is classed as a van or i'll pay silly about of tax as BIK thanks in advance Rich |
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18th Mar 2021 5:50pm |
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| Supacat Member Since: 16 Oct 2012 Location: West Yorkshire Posts: 11018 
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Search P11D in this thread and there's plenty of reading for you to decide.
You'll note JLR careful response on the issue also: https://www.defender2.net/forum/topic74529.html |
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18th Mar 2021 6:18pm |
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| TRGRichie Member Since: 03 Mar 2021 Location: Yorkshire Posts: 180
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Says the 90 hardtop is N1 classification which as I understands it makes it a van,
Just wondering why there’s so much doubt around this subject? Thanks Rich |
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18th Mar 2021 7:12pm |
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| Supacat Member Since: 16 Oct 2012 Location: West Yorkshire Posts: 11018
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N1 classification is irrelevant for HMRC and the relevant legislation. It's been covered in previous pages of this thread or you can read the judgement in the link above to understand all the nuances, and there are many.
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19th Mar 2021 6:23am |
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| TRGRichie Member Since: 03 Mar 2021 Location: Yorkshire Posts: 180
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Honestly don’t understand why you say it’s irrelevant?
It is this classification is it not that my accountant will use when working out what tax relief / benefits and Bik payments I appreciate there are grey areas when it comes to commercial vehicles, like twin cab pick ups and kombi vans etc. But we are talking about a commercial Version of the defender 90, it has no back seats, it has no rear windows and it has a load space bulk head, it is clearly a van, and from a company point of view will be used as a such. It’s kind of why I asked, I’ve read the thread and there’s lots of arguing and opinions but they seem to be more about the grey areas of company van ownership. Surely a 90 ht is not a grey area vehicle in this respect? Thanks Rich |
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19th Mar 2021 7:46am |
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| Supacat Member Since: 16 Oct 2012 Location: West Yorkshire Posts: 11018
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No - N1 classification is irrelevant because it does not form part of the definition of "goods vehicles" which is key to deciding whether you can claim the taxable benefits or not.
The case was one where the HMRC reached a view different from that of the owners/users, applied this view retrospectively and issued notices/bills accordingly. The High Court decision was that their views have been upheld and their appeals allowed. |
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19th Mar 2021 10:10am |
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| TRGRichie Member Since: 03 Mar 2021 Location: Yorkshire Posts: 180
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well my accountant is sorting it out and h'es happy he has all the correct info.
thanks for your input though, i'm not well enough versed in business accounting to navigate my way through the mind field that appears to be Van ownership. thanks Rich |
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19th Mar 2021 5:50pm |
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