Is it true that Dealers who buy in a bunch of cars and pre-register them don't charge VAT on?
Somebody is trying to tell me that they often "swallow" the VAT when they sell a pre-registered car to a customer. I can't see how they can invoice you for a car and not charge VAT when they have had to pay the VAT when buying a car from the manufacturer.
This is what I think he is saying
A dealer buys a car from the manufacturer for £20,000 inc VAT.
They pre-register it.
A customer comes along and they sell it to them for £22,000 Net.
They don't have to charge VAT for some reason, despite being VAT registered
They then pay £350 to Customs and Excise because that is 17.5% of their profit (£2000)
Is that the case? I thought all VAT registered companies had to charge on VAT. Unless it's VAT exempt like food.
Gary A
Somebody is trying to tell me that they often "swallow" the VAT when they sell a pre-registered car to a customer. I can't see how they can invoice you for a car and not charge VAT when they have had to pay the VAT when buying a car from the manufacturer.
This is what I think he is saying
A dealer buys a car from the manufacturer for £20,000 inc VAT.
They pre-register it.
A customer comes along and they sell it to them for £22,000 Net.
They don't have to charge VAT for some reason, despite being VAT registered
They then pay £350 to Customs and Excise because that is 17.5% of their profit (£2000)
Is that the case? I thought all VAT registered companies had to charge on VAT. Unless it's VAT exempt like food.
Gary A