Comercial jeep Long test drive

ballooba

FX Meister wrote:

When selling it on a lot of potential buyers would be put off by you not being able to give them a Vat receipt.

That doesn't make sense. If you don't have a VAT number then you can't charge VAT, then they don't need a VAT receipt. Only sellers with a VAT number would need to charge VAT and provide a receipt.

FX Meister

For example. If I'm a registered company looking to buy a Land Cruiser second hand I can buy it from an electrician who is also Vat registered for €25K with a Vat receipt and claim the Vat back on it. If I buy it from Joe who works for the electrician but bought it himself I pay €25K but I can't claim the Vat back. So it makes more sense to buy it from the electrician rather than his employee. If Joe wants to attract the same buyer he has to lower his price.

EIN

ballooba wrote:

Eh, you have to pay the VAT?

That's it.

eh doh but come resale if you trade it into a garage, they will give you 21% less than its worth...due to not having a vat receipt....

so you would have a limited market for your vehicle without a vat receipt
unless you dropped the price of your vehicle accordingly. the other way around this is to hold on to the jeep for a good while to soften the blow of loosing the 21% when you trade in at a later stage.

EIN

FX Meister wrote:

When selling it on a lot of potential buyers would be put off by you not being able to give them a Vat receipt.

I'm hoping to not pay Vat on mine, I plan to approach my boss and get him to buy it and refund the Vat to me. I know it will be registered to the company but I trust him on that. When I sell it on then I pay the Vat don't I? I presume that it's the Vat on the selling price? Is it possible to have him sell it to me cheaper than market value to avoid paying a high Vat rate? Are there any other drawbacks? Will it affect my insurance?

when you come to insure the jeep the insurers will ask you if you own the vehicle... and if its registered in your name... i think that you would have to insure the jeep in the companies name also. god forbid if the company went bust your jeep is gone.... as it technically is owned by the company.. as its registered to the company....

just my 2 c

ballooba

FX Meister wrote:

For example. If I'm a registered company looking to buy a Land Cruiser second hand I can buy it from an electrician who is also Vat registered for €25K with a Vat receipt and claim the Vat back on it. If I buy it from Joe who works for the electrician but bought it himself I pay €25K but I can't claim the Vat back. So it makes more sense to buy it from the electrician rather than his employee. If Joe wants to attract the same buyer he has to lower his price.

No he doesn't. The 21% is VAT it does not go to the seller, it goes to the Revenue. Therefore if you are not charging VAT then of course your price should be lower than the person who is charging VAT. Perhaps by, ooh let's see, 21%? If you don't have a VAT number you do not collect VAT!

EIN wrote:

eh doh but come resale if you trade it into a garage, they will give you 21% less than its worth...due to not having a vat receipt....

so you would have a limited market for your vehicle without a vat receipt
unless you dropped the price of your vehicle accordingly. the other way around this is to hold on to the jeep for a good while to soften the blow of loosing the 21% when you trade in at a later stage.

I hope you weren't suggesting that your take on the situation was a no brainer. If so it's "duh" not "doh", and read the above. The 21% is not your money!

EIN

ballooba wrote:

I hope you weren't suggesting that your take on the situation was a no brainer. If so it's "duh" not "doh", and read the above. The 21% is not your money!

duh me arse!

its like this
say a private individual buys a landcruiser lwb gx for €42,000 incl vat.

if after one years use he decides to sell it.. then valued 37,500 (rough figure) incl vat.. he can not provide the new purchaser with a vat invoice as the seller doesent have a vat number.

therefore if a person buys this jeep he cannot claim the vat back..
so he is less likely to purchase this jeep over one that is sold with a vat receipt where he can claim the vat back!


which would u do..

buy a jeep when you cant claim any vat back or one where you can claim the vat back (assuming you have a vat number)

therefore its a no brainer..... if you buy a commercial vehicle without a vat number, when you come to sell it or trade it you take a hit!


colm_mcm what do you think

ballooba

Íosa Criost.

The private seller cannot provide a VAT invoice because he is not charging VAT. So the price should be lower than when buying from a business. By 21% i.e. the rate of VAT. There is no VAT when buying privately, so there is no need for a VAT invoice, hence there is no VAT to claim back.

The business seller provides a VAT invoice to prove that they have collected the VAT. They have to charge VAT because they have a VAT number. The VAT does not go to them, it goes to Revenue. The reason you get a VAT receipt is so that you can claim the VAT back from Revenue if you are also VAT registered.

You would want to be a little more sure of your facts before you go suggesting it is a no brainer.

colm_mcm

If you're not VAT registered, you do a lease, ther bank is then buying the jeep from the dealer on belalf of the customer, when the jeep is traded back in to a garage, the bank invoices the garage for the jeep and hey presto, the jeep has a VAT receipt.

FX Meister

Ahh yeah B, I get your point now. So my boss buys the 4x4 for €24,000 claims the vat back, €5000. The 4x4 costs him €19,000. I give him the €19,000 and the jeep is mine except in name. Four years down the road he sells the 4x4 to me for €9,000 (which I don't actually pay him as I bought the 4x4) and give him the €1900 to pay to the tax man. So I save €3000 in tax. Right or wrong?

EIN:
My boss is a good friend of mine and is a sole trader. I doubt he will go bust but in the event that this would happen I'm sure he will inform me and I can buy the jeep before he goes bust.

FX Meister

colm_mcm wrote:

If you're not VAT registered, you do a lease, ther bank is then buying the jeep from the dealer on belalf of the customer, when the jeep is traded back in to a garage, the bank invoices the garage for the jeep and hey presto, the jeep has a VAT receipt.

Hmmm, not sure I'd be into that as I'd want to own the jeep myself and not just lease it. Interesting option though. Who actually owns the jeep? The dealer?

ballooba

FX Meister wrote:

Right or wrong?

Sounds about right. Very complicated though.

FX Meister

Yeah it does sound complicated but I guess I avoid paying a good bit of tax and I avoid paying the tax for a few years. If he wants he can take out a loan to pay for it and I can pay off the loan then he can claim tax relief on the laon as far as I know. At this stage I think I'm going to go for the land cruiser so I'll test drive a few of the LWB ones. I'm away on holidays for a month and then moving into a new place in september so I think I'd be best off waiting until the new year to get a better deal.

ballooba

If you are getting the boss to buy it and you are paying him in cash then effectively he is drawing money down from the company without paying tax on it. Remember that bit. By you giving him the full amount minus VAT he is still making a profit.

Also, possibly not the best idea to have posted up here in such detail about this. The VAT man in the UK has more power/rights than any other government body, I assume it is the same in Ireland.

FX Meister

Im talking hyothetically here of course.

ballooba

FX Meister wrote:

Im talking hyothetically here of course.

colm_mcm

FX Meister wrote:

Hmmm, not sure I'd be into that as I'd want to own the jeep myself and not just lease it. Interesting option though. Who actually owns the jeep? The dealer?

technically the bank owns it, the same way they own a car on HP. it's still registered in your name.

keefg

Another possible option is to register a company (plumbers or something)with the CRO (Cost €100) but never trade, then register for VAT (Free).

Pay for the jeep in full from the dealer, claim your VAT back asap then shut the company down as a non-trading entity or untill you sell the jeep (remember, you will have a VAT number & can provide a VAT invoice)

Not sure of the legalities of that but maybe could be an option???

keefg

Maybe my idea wasn't such a good one !!! :rolleyes:

Just thought about the fact that you won't be filing any tax returns so the smelly nasty taxman will be chasing you after 12 months or so.


I shall shut up and keep my poxy advice to myself.:D