You maybe need a new accountant, what happened the vat you claim back on the 7k purchase price
if your official. Maybe becomes a issue if driveway trading
You maybe need a new accountant, what happened the vat you claim back on the 7k purchase price
The majority of cars coming in don’t have vat, only a very small percentage are vat qualifying
Ok I wasn’t aware of that, if all cars now come with a vat invoice to reclaim then it shouldn’t be that big of an issue as initially thoughtIt isn’t as simple as that. They don’t “have VAT” because of the margin scheme being in place, that changes with the new rules.
As with any business supply you can reclaim VAT on your purchases and pay Vat on your sales.
if your official. Maybe becomes a issue if driveway trading
If you're not official then you won't be paying VAT anyway. The problem arises if you are official or legit but not VAT registered, which I assume is a very small number of dealers given the 85k threshold.
Even a minor driveway trader full time scraping a living will soon exceed vat threshold on turnover. Driveway traders under that radar will end up trawling the ni trade, auctions, gumtree and facebook market placeif your official. Maybe becomes a issue if driveway trading
I don't know what way it will pan out, but a lot of folk don't seem to understand the margin scheme to start with. It's not VAT on the purchase price or selling price as it stands currently, or VAT on the net profit. Regardless of whether a car is VAT qualifying or not, VAT registered dealers pay 20% VAT on the gross profit they make on that car. That 20% is included in the gross profit, not 20% on top of. So if you buy a car for £1,000, sell it for £2,000, but spend £500 prepping in, you pay HMRC £166.67 of VAT (the VAT element of the £1,000).
As I said before, customers/friends/family/resident car experts generally don't seem to know it exists, or that income tax exists for that matter, when they are telling you what fortune you are going to make on their car and how they must be in the wrong job etc etc
Yes but as stated earlier, will the margin scheme be applicable in NI when a border goes down the irish sea? Do we revert back to claim vat back on purchase price, pay vat on sale price, revenue scoops the difference?I don't know what way it will pan out, but a lot of folk don't seem to understand the margin scheme to start with. It's not VAT on the purchase price or selling price as it stands currently, or VAT on the net profit. Regardless of whether a car is VAT qualifying or not, VAT registered dealers pay 20% VAT on the gross profit they make on that car. That 20% is included in the gross profit, not 20% on top of. So if you buy a car for £1,000, sell it for £2,000, but spend £500 prepping in, you pay HMRC £166.67 of VAT (the VAT element of the £1,000).
As I said before, customers/friends/family/resident car experts generally don't seem to know it exists, or that income tax exists for that matter, when they are telling you what fortune you are going to make on their car and how they must be in the wrong job etc etc
Yes but as stated earlier, will the margin scheme be applicable in NI when a border goes down the irish sea? Do we revert back to claim vat back on purchase price, pay vat on sale price, revenue scoops the difference?
I don't know what way it will pan out, but a lot of folk don't seem to understand the margin scheme to start with. It's not VAT on the purchase price or selling price as it stands currently, or VAT on the net profit. Regardless of whether a car is VAT qualifying or not, VAT registered dealers pay 20% VAT on the gross profit they make on that car. That 20% is included in the gross profit, not 20% on top of. So if you buy a car for £1,000, sell it for £2,000, but spend £500 prepping in, you pay HMRC £166.67 of VAT (the VAT element of the £1,000).
As I said before, customers/friends/family/resident car experts generally don't seem to know it exists, or that income tax exists for that matter, when they are telling you what fortune you are going to make on their car and how they must be in the wrong job etc etc
The £500 you spent prepping it can that be claimed as an expense then?
Could they be busier with the amount of VW's and BMW's etc on the road ?Oh great, so we all have to buy home market stuff now like Jaguar Land Rover.
At least the AA and RAC will prosper with a huge increase in membership to cover the lack of reliability but they will also find themselves a lot busier with a lot more breakdowns.
Oh great, so we all have to buy home market stuff now like Jaguar Land Rover.
At least the AA and RAC will prosper with a huge increase in membership to cover the lack of reliability but they will also find themselves a lot busier with a lot more breakdowns.
More good news