Can a dealer add VAT to a pre-registered ex-demonstrator?

Is it correct for a main dealer to add VAT to a pre-registered ex-demonstrator
when sold from the forecourt?

Asked on 23 April 2015 by boatman126

Answered by Honest John

While the car was a demonstrator the dealer could reclaim the input VAT. If the dealer then re-sells the car, he has to charge 20 per cent VAT on the sale price. But this should not worry you because the total price at which he sells the car should not be more than the average price at which identical cars are sold.

Tags: legal and consumer advice buying a used car vat

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