Part Exchange van for car and VAT

What are the VAT implications

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Client bought van in 2011 and claimed input VAT.

The van was sold for £2k as part exchange for a car in 2015 on which VAT not charged or claimed

Is output VAT due on the sale of the van in part exchange (ie as input VAT was claimed therefore output VAT due ?) or is it simply a discounted price for the car and no output VAT due ? 

Rules on part-ex state "if you supply goods or services and receive other goods or services in exchange (or part ex) you must account for the VAT on the amount the customer would have paid you if they had given you money"..but this isn't part of his normal supply.

Any help gratefully received

 

Replies (1)

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RLI
By lionofludesch
05th Apr 2017 18:29

Yes - account for output tax. And don't forget to give the dealer a tax invoice.

No - it's not a discount. It's a supply of goods.

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