Gov.uk advice.
Question:
VAT when you sell a vehicle
Who are you selling it to? Someone in the UK
Is it new or used? Used
Was VAT charged when you bought the vehicle? YES ( but client couldn't reclaim it)
Then the answer is Charge Standard Rate VAT ( which is wrong, because they couldn't reclaim VAT should not charge it)
If you change the Answer to NO
The answer is use Margin Scheme for Second Hand cars.
Is it just me, or is this going to cause lots of problems?
Replies (3)
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Confusing indeed
I suspect that the intention is that the guidance is specific to those in the motor trade. But any business planning to sell a car, and searching for advice from HMRC, is likely to come across that misleading guidance.
Wrong question
The question should be "Was VAT claimed when you bought the vehicle ?"
Makes all the difference.
Or...
The disposal of any goods for which input tax deduction is not allowed is exempt, under VAT Act 1994, Sch 9, Group 14. I notice HMRC do not publish a leaflet on this!