Vat for Car Dealers

Vat for Car Dealers

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Dear Members ,

A car Dealer which Buys New and Second Hand Cars and is Vat Registered .

He is Operating Margin Scheme i-e Vat on Profits made from second hand car sale.

Re: New Cars ...... How do you account for input and output Vat on new Cars Bought and Sold he has Vat invoices.

And most importantly .... What do you include in Purchases Box 7 on vat return and Sales Box 6 ?

He has purchases figure quite high and no input vat or very low figure .

Please Help.
Rehan Arain

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By User deleted
26th Jul 2007 16:27

quite simple really!

all cars are treated under margin scheme rules (VAT charged on the profit made).

The only exception comes where Input VAT is charged on the purchase. in these cases VAT must be accounted for under normal rules i.e. VAT reclaimed on inputs and charged in full on the corresponding sale.

the net VAT paid over is actually the same but if a vehcile is bought and not sold in the same VAT period then there is the possibility of VAT refunds being due to the client - which is good for their cashflow.

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