What does 'VAT qualify' mean?

What does 'VAT qualify' mean. Do I have to pay VAT on top or do I get it back?

Asked on 6 October 2017 by tony louka

Answered by Honest John
Ex-rental and ex-demo fleet cars are usually 'VAT qualifying', which means that if a VAT registered trader or dealer buys them he can claim back the VAT element. So, say he pays £10,000 for a car at auction, he can reclaim £1,666.66 VAT input tax from HMRC. If he then sells the car to a member of the public for £12,000, the 20% VAT element of that is £2,000 and the trader has to pay the £2,000 to HMRC. The member of the public who buys the car pays no more than the £12,000.
Similar questions
I'm about to purchase an ex-demo Volkswagen T-Roc from a main dealer for just under £22k but the invoice says it includes 20% VAT at around £3665. I thought secondhand goods were exempt from VAT?
Using approximate figures, if I were to buy a new Lexus IS 250C I would have to pay a basic price of £30,000 plus VAT of £6000. However, I want to buy a pre-registered ex-demo with just a few hundred miles...
I bought a 2018 Land Rover Discovery Sport for over £34K from a main Land Rover. We discovered that the whole of the nearside had been repainted . We complained to the dealer which bought the car back...


Value my car