My client's company converts used Vans (transit style VW's) into campervans/motorhomes.
VAT is shown and claimed on the purchase invoice.
Input vat is also being claimed on materials and overheads.
Assuming the following applies: (per HMRC website)
Motor homes and motor caravans
Motor homes and motor caravans aren't considered to be cars for VAT purposes so long as certain features have been incorporated into the vehicle. These are:
- 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
These features have been agreed between HMRC and the Society of Motor Manufacturers and Traders.
Would the client need to account for Output tax on:
the sale proceeds
the profit (as with the margin scheme)
not at all?
i.e. is this as my client suggests a loophole?