Vat Change - Anti-Forestalling

Vat Change - Anti-Forestalling

Didn't find your answer?

We retail high end motor cars and have started to be asked the question by customers of saving the 2.5%, by giving us large deposits/prepayments prior to the vat increase in January 2011.

I've read the Vat guidance notes on deposits and prepayments, and it seems to me that we would only have to charge the supplementary 2.5% charge if the deposit/prepayment was over £100,000 (subject to the other stipulations being ok).

So is it right that if somebody wanted an £80,000 car to be delivered in January 2011, and paid us the whole amount in December 2010, we could charge him 17.5% even though this was not in normal commercial practice and the early payment was purely to avoid the vat increase.

I must admit that this feels wrong, but if I am reading the rules correctly, we could market this to encourage December 2010 sales.

Any thoughts

Replies (0)

Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.