My client is considering the following :
To buy second hand vans, renovate them and convert them to a motor caravan.
My understanding is that he can reclaim vat on the purchase of van (if vat charged)
Also renovation materials.
Does he need to charge vat when he sells the converted vehicle if it meets the following:
- a permanently installed sink and cooking facilities
- seating arrangements so that diners can sit at the meal table
- at least one bed which has a minimum length of 1.82 metres
- a permanently installed fresh water tank with a minimum capacity of ten litres
In what circumstances would he need to charge vat. ?
Are the supplies of van exempt or zero
Many thanks for your assistance.
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Replies (2)
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Standard rated
You've quoted the HMRC requirements for a motor home not to be treated as a car. That really doesn't make any difference to most customers because the sale of a van or a motor home is a standard rated supply. Yes you can reclaim any VAT charged on the purchase but you'll have to add VAT on the sale price. Van supplies are not zero rated or exempt.
If you buy a van which doesn't have VAT charged, perhaps from a private owner, then I think you can operate the margin scheme which means yo pay VAT on the profit, not the selling price.
neileg
Thank you very much for your reply. My client had been told that he would not have to charge vat which confused me and your answer has clarified situation.