I became paraplegic (not the drunk sort) after an accident last year. I will get some compensation in the next year or two.
After a recent change in the law, wheelchair users who need to have a car adapted in some way, no longer have to pay vat on new cars.
These two things combine to give me the rare opportunity to drive and own some fantastic cars, without it costing a penny!
example, Porsche 911 turbo, list price £89,386, minus 17.5%, equals £73,743.45, a saving of £15,642.55. If iI sell it after a year at the parkers trade price of £80,395, that will leave almost 9 grand, which should be more than enough for fitting and then decommissioning hand controls, insurance, fuel, travel sweets and probably the odd speeding fine!
As the Porsche isn't the most practical car for a wheelchair user (where do you put the wheelchair?) I could really do with some suggestions, what other cars have great residuals?
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I too get vat exemption on cars, but ive not got the sort of money that buys anything that wont lose money hand over fist. I thought i may be at least ok with the car i have at present (a Fiat bought at £4.5k off list price but no, still losing megadosh!)
I would suggest something like a Merc or BMW, anything thats new to the market and likely to be in demand and supply tightly controlled. As always buy the optimum spec, dont go mad ticking the boxes on the options form, get a good metallic colour. You wouldnt be the only person to drive a Porsche with hand controls though!
When you go to trade in the first car you bought in this way the dealer will do his upmost to offer you a low price because he knows you bought it cheap. Dont tell them you want to buy vat exempt before they price your trade in! They'll want to know what price you paid for the last one etc. The VAT you save doesnt have to be paid back upon sale btw! Oh and it also applies to used cars too, somehow (not quite sure how though).
Tony
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Some cars (mainly taxis and the like) used exclusively for company duties can be treated as business assets. As they are sold at a loss after 3 years or whatever, the company claims back the VAT paid on purchase and pays out VAT only on the sale price, effectively pocketing the difference.
Oh and if you have the cash, I would suggest a Mercedes E270 CDi estate in a good colour like silver, with leather, preferably in Elegance or Avantgarde spec but without too many other options. You might have to wait a while to get one, but then that is pretty much inherent in getting a car with no depreciation anyway.
I don't know how much modification you need, but something like a Sharan modified for wheelchair access is only going to be saleable to other people who qualify for the VAT exemption - and therefore valued accordingly.
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i only need simple hand controls, 300 notes, fitted in half an hour. i'll have a look at the merc though, thanks.
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the companyclaims back the VAT paid on purchase and pays out VAT only on the sale price, effectively pocketing the difference.
When I was VAT registered, you paid your VAT on purchase price and immediately claimed it back on that quarter's return. On selling, the VAT on the sale price was charged to the purchaser and remitted to C&E.
Or is it different for cars?
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Isn't that what I said? If it isn't, that's what I meant. Yes, there is a gap between reclaiming the VAT on the purchase and paying it out on the sale price.
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cheers tony, I gather the new mini has excelent residuals at a more realistic price.
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Just one small point... if a car costs £10000 + VAT, it is £11750 including VAT.
£1750 is actually 14.89% of £11750 - although you add 17.5% to get the VAT inclusive price, you actually take off 14.89% from the larger to get the VAT exclusive price.
Having said that, choose the right car and you could still easily be quids in.
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The problem with the new MINI auto is that it has a drink problem and i guess thats the reason that the auto ones dont hold their money.
Im getting a new smart new week vat exempt - with hand controls, I hope that will hold a reasonable bit of its value over the next year or two.
Tony
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Oddbod, don't think that you HAVE to buy new.If you found, say, a used company car you fancied, that had only been used in business, this would still enable you to re-claim the VAT element.The dealer would have to sell it described as 'VAT QULIFIYING' within the sale price.This could well apply to many ex-lease vehicles.
Also, an easy way to find out low depreciating values, ask the dealers to work out figures on a PCP (personal contract plan), to finance it.Take a look at the variation, of guaranteed future values & you'll soon find ones that loose you least, in theory.
Tony, is your Smart,the one the dealer was messing you around on the finance?What was the result?
VB
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Vansboy:
The salesgirl left before Easter and hadnt done a thing! And its Motability. Say no more really.
Hopefully Friday!
Tony
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New M3 CSi if you can get hold of one.
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A BMW X5 should do the trick, waiting list, high residuals & lots of space. Personnally I hate big 4-wheel drives but maybe you don't.
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Also not a huge fan, but at a push i suppose i could make do...
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In all seriousness why don't you contact some of the manufacturers and put a proposal to them and enter a contract for a year or so, where you don't pay for the car but have to give it up a 10k miles or a year.
Volvo already has a scheme with the army based in Germany, where they give/sell a car to a squaddie who then when (s)he comes back to this country a year or so later they buy it back off him and therefore save on the VAT but build it into their margins when selling 2nd hand.
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Going back to the question of residuals, if you have £29k to spend then the diesel-powered BMW 330 Cd is not due out until next spring in the UK, in spite of being available in Europe much sooner. I guess that means that residuals will probably be high as demand will exceed supply. Can't remember if it's reviewed here or not, but 4car called it a real-world alternative to an M3. Should be big enough to be adaptable for your needs. Only thing is, you may not want to wait nearly a year!
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The trouble i found is that (as i mentioned earlier) if you stick with the same dealer come trade-in time, he knows what you paid and he\'s gonna want to pay you back less than that, which may or may not be the going rate. If you have a fair amount of spare dosh then you could purchase car 1 and after x months order/purchase car 2 while driving about in car 1. When car 2 is delivered you then flog car 1 to a different dealer than you purchased it from (having had the adaptions removed). My thought is this, if you dont lose lots and possibly gain then well done, but if it all goes wrong and you lose money on changing - well its less than those poor people who had to pay the VAT! It should be easy when you\'re dealing with quality stuff in optimum specs, ive found it a bit of a struggle with a Fiat Punto (hence a loss on list after 8 months of £6k! Loss against my purchase price £2.2k)!
I have also been told that Her Majestys Customs and Excise can and do check on a random selection of cars supplied vat exempt (as is their right) and so anyone thinking of borrowing a wheelchair from Aunt Sylvia, making a false declaration, and saving £5k on an Impreza STi should think very carefully about the consequences. However if a car is bought for the sole use of the wheelchair user as a passenger then that appears to be ok.
This is the link to the HMCE webpage regarding this:
www.hmce.gov.uk/forms/notices/701-59.htm
Tony
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Well the obvious question is "how many cars a year can you buy like this?"
We'd all queue up to buy our next car via you at VAT free price plus a few bob profit.
Your next career move sir
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Can't say it hasn't crossed my mind. So far I haven't been able to find any mention of a limit in any of the info I've looked at.
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Im in the middle of changing my second vat free car for my third vat free car, and no comment has been made by the guy ive spoken to at HMC&E.
However I would suspect that after more than 2 or 3 cars a year they may do some checks, and it would be a shame if a scheme that can help a lot of people get mobile more easily were withdrawn due to abuse by a few.
There must be rules which define when you go from being a private seller to being a trader though, ie how many cars you can sell a year.
Tony
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so do you think one porsche a week might be pushing it a bit then?
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do you use hand controls then tony, if so which sort?
whats the process for buying a car with this scheme?
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Did I hear Capital Gains Tax???
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Probably not. If you buy one car a year it would be within your £7900 annual exemption - it's charged on profits, not revenue (assuming you haven't used it for anything else), plus it's a car so as a chattel is exempt.
If you were doing it regularly, it would of course be taxable - but as income. And of course, if you were trading - more than £55k a year as an INCOME stream, you would be compulsorily registrable for VAT anyway.
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