Should a company charge VAT on sale of Van

Should a company charge VAT on sale of Van

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A company whose trade is retail of electrical light fittings is registered for VAT.

They sell a company van to an unconnected third party. The Sales invoice has VAT on it, is this correct?

Replies (6)

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By petersaxton
26th Feb 2014 17:31

Yes

They are registered for VAT!

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By taxhound
26th Feb 2014 18:45

Not necessarily

You could just add VAT in the usual way, or you could use the margin scheme when you sell it.

http://www.hmrc.gov.uk/vat/start/schemes/margin.htm

Make sure you include the correct wording on the sales invoice about not reclaiming vat though.

 

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Euan's picture
By Euan MacLennan
27th Feb 2014 10:20

How did they buy the van?

I may be completely wrong, but I seem to recall that if they bought the van second-hand from a dealer operating the margin scheme and were therefore unable to reclaim any input VAT on the purchase, they must apply the margin scheme when they sell it - presumably for less than they paid for it and hence, no VAT.

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By taxhound
27th Feb 2014 10:38

clarification

Euan makes the point better than me.  To use the margin scheme, they would need to have acquired the van second hand themselves without reclaiming vat.  But I don't think the margin scheme is compulsory - they could add vat at 20% to the whole lot if they prefer...

 

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Replying to Adam12345:
Red Leader
By Red Leader
27th Feb 2014 10:41

safest

I don't think your client will be penalised for charging VAT. If the buyer accepts, then why worry?

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By hilaryfursdon
02nd Feb 2018 10:20

We are a company that was vat registered when we purchased a van 3 years ago and we reclaimed the VAT. We are not in the business of selling vans this is 1 of 2 works vans that we own. Now, 3 years we are no longer VAT registered and we are going to sell the van. I am assuming that because we are not VAT registered we do not have to charge VAT and that we are not liable for the VAT re reclaimed. Is that correct?

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