Trading at Auctions

Honest John Back Room » Motoring discussion
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Thu 1 Oct 2015 11:11
Trading at Auctions - adyrob

HI

We have a VAT registered Ltd Company.

If we were to buy a car at an auction. Paying the VAT.

Can I claim the VAT back?

If we then sold this car within a few weeks. Would I have to charge the purchaser VAT on the sale?

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Thu 1 Oct 2015 11:58
Trading at Auctions - RobJP

It all depends on whether the car is in the VAT margin scheme or not. Which basically will be dependent on how it was previously sold, etc.

However, I'd suggest you take professional advice from your accountant.

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Thu 1 Oct 2015 13:27
Trading at Auctions - pd

Yes, if it is VAT qualifying and the VAT is stated seperately on the invoice then you can claim it back if you are purchasing it solely for business purchases (which "stock in trade" would include).

You would then have to account for VAT in the selling price when you sold it and re-pay that to HMRC.

Similarly, if you buy a margin car and you are VAT registered when you sell it you will owe HMRC margin VAT.

Buying and selling cars is no different to any other VATable goods.

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Thu 1 Oct 2015 18:07
Trading at Auctions - Falkirk Bairn

In general terms VAT on purchase cars is not reclaimable unless it is part of the company business (car rental. leasing, driving school, demonstrator cars) etc etc

In general terms VAT on purchase of Vans is reclaimable.

Hence some companies (small company owners) buy posh pickup truck type car/vans able to tow 2-3 tons can be deemed part of the legitimate business of an architect / builder BUT not say a lawyer.

Mini hatchback - no VAT reclaim on purchase price

Mini Van - VAT back but again Vat element goes to HMRC on sale.

In car leasing typically 50% of the VAT on the monthly rental is reclaimable.

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