vat on second hand tyres

vat on second hand tyres

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My client sells second hand car tyres. We will need to be vat registered soon. Most of his tyres are brought from other EU countries ( suppliers both vat registered and not).  My client phoned me today saying that he bought two second hand tyres from his vat registered competitor and they did not add vat to his invoice.

I started searching the internet and found that second hand tyres may come under VAT margin scheme for second hand goods - am I right? ( it does not explain why he was not charged vat).

If he could apply VAT margin scheme who to manage that on daily basis? I understand that he needs to record every single purchase and then its sale to work out vat - how can it be done if he sells hundreds of tyres weekly?

Replies (4)

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By johngroganjga
13th Sep 2013 23:26

If the vendor of the tyres was using the margin scheme that would indeed explain why VAT was not added to the invoice.

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By ShirleyM
14th Sep 2013 09:42

Charge VAT on sale value?

If he could apply VAT margin scheme who to manage that on daily basis?

I suppose he could charge VAT on the full sales value, if he doesn't want to keep full records of the purchase & sale prices of each tyre.

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By johngroganjga
14th Sep 2013 10:01

Agree with Shirley. But if he is selling to customers who are unable to recover VAT that will make him more expensive, or his profit margin smaller, than any competitors using the margin scheme.

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By User deleted
14th Sep 2013 10:13

Global Accounting

I don't imagine that many second hand tyres are going to cost more than £500, so your client could use the Global Accounting method - see para. 14 of VAT Notice 718.

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