selling an item, do you add VAT?

[eddiegts]

I was told by my accountant and my local Vat man that if I buy a van etc with no vat I can't charge vat to the person who buys it

[WorcsWuss]

I was told by my accountant and my local Vat man that if I buy a van etc with no vat I can't charge vat to the person who buys it

 

That's how I understand it.... so if the buyer of the trailer in the OP is VAT registered and buys it 'with no VAT', they can't claim it back nor add it on if they sell it. The VAT has been paid on the new price, the revenue are happy because they've retained VAT at it's highest value, once it's 'dropped out' of the system it can't then become 'VAT-able' again...?

[eddiegts]

That's how I understand it.... so if the buyer of the trailer in the OP is VAT registered and buys it 'with no VAT', they can't claim it back nor add it on if they sell it. The VAT has been paid on the new price, the revenue are happy because they've retained VAT at it's highest value, once it's 'dropped out' of the system it can't then become 'VAT-able' again...?

 

This is how understand it. But I maybe wrong. I am not an expert but I pay a very good accountant to be one so all I can do is do what he says.

[WorcsWuss]

This is how understand it. But I maybe wrong. I am not an expert but I pay a very good accountant to be one so all I can do is do what he says.

 

Risky strategy....! A friend of mine did that and ended up with his accounts frozen by the revenue and losing his business! [Although I don't think the accountant was actually any good..... ]

[GardenKit]

If a vat registered trader were to buy in a secondhand item from a non registered owner he could not be charged vat by the seller.

However when he comes to sell it on he has to add vat, hence the much higher price he sells for which equates to cost + profit + 20% on total.

If he has registered under the VAT 'secondhand goods scheme' ( it applies to my trade, but I am not sure if all goods are eligible) he only pays VAT on the profit he makes. He cannot show this VAT on the sales invoice, so the purchaser, even if VAT registered cannot reclaim any Vat on the purchase.

This supports the fact that the VAT has already been paid but shows that the VAT man wants his bit of my profit.

[firewood]

If a vat registered trader were to buy in a secondhand item from a non registered owner he could not be charged vat by the seller.

However when he comes to sell it on he has to add vat, hence the much higher price he sells for which equates to cost + profit + 20% on total.

If he has registered under the VAT 'secondhand goods scheme' ( it applies to my trade, but I am not sure if all goods are eligible) he only pays VAT on the profit he makes. He cannot show this VAT on the sales invoice, so the purchaser, even if VAT registered cannot reclaim any Vat on the purchase.

This supports the fact that the VAT has already been paid but shows that the VAT man wants his bit of my profit.

 

Correct. Whether you were charged vat or not on your purchase you must charge vat if you are vat registered. Under the second hand goods scheme you are not required to show it on your sales invoice as the vat is levied on your margin and it would enable a purchaser to work out your profit.

 

Tour operators also have a similar scheme.

 

 

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