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vat on van selling privately

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  • 19-11-2008 5:55pm
    #1
    fm
    Registered Users Posts: 669 ✭✭✭


    i am in the process of selling my van and was wondering do you have to charge 21% vat if you sell it privately, whether or not the potential buyer is vat registered(i am)?


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    #2
    L-M
    Registered Users Posts: 23,694 ✭✭✭✭L-M


    Did you claim the VAT back?


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    #3
    fm
    Registered Users Posts: 669 ✭✭✭fm


    yes 2 years ago wheen i bought it new


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    #4
    L-M
    Registered Users Posts: 23,694 ✭✭✭✭L-M


    fm wrote: »
    yes 2 years ago wheen i bought it new


    I'm fairly sure you have to pay this back again, ie. 21% of the current value of the car. You might get this of www.ros.ie Then charge the full retail (121%) and let the next fella worry about claiming the VAT back or not.


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    #5
    Savman
    Closed Accounts Posts: 8,323 ✭✭✭Savman


    Limerick-man wrote: »
    Then charge the full retail (121%)
    Jesus, I missed that in the budget :eek:


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    #6
    L-M
    Registered Users Posts: 23,694 ✭✭✭✭L-M


    Savman wrote: »
    Jesus, I missed that in the budget :eek:

    Lol, what i meant was he's currently charging the ex VAT price, and needs to charge the inclusive of VAT price.


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    #7
    fm
    Registered Users Posts: 669 ✭✭✭fm


    i have been advertizing it with 21% vat included and someone offered to buy it for cash(he is not vat registered so cant claim it back).i have checked the ros site and cant find anything about it.


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    #8
    L-M
    Registered Users Posts: 23,694 ✭✭✭✭L-M


    fm wrote: »
    i have been advertizing it with 21% vat included and someone offered to buy it for cash(he is not vat registered so cant claim it back).i have checked the ros site and cant find anything about it.

    The ros site is to find the current market value of your car to see how much VAT is owed back. You need to pay the VAT back before selling it on.


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    #9
    fm
    Registered Users Posts: 669 ✭✭✭fm


    Limerick-man wrote: »
    The ros site is to find the current market value of your car to see how much VAT is owed back. You need to pay the VAT back before selling it on.

    no i dont think it works that way.i dont owe them vat because i already claimed it back,its my right to have claimed it back because i am vat registered.for example,if i never sold the van and drove it into the ground i dont owe the revenue the vat because there is no sale.what i need to know is,legally do you have to charge vat on the sale of a second hand commercial vehicle


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    #10
    L-M
    Registered Users Posts: 23,694 ✭✭✭✭L-M


    fm wrote: »
    no i dont think it works that way.i dont owe them vat because i already claimed it back,its my right to have claimed it back because i am vat registered.for example,if i never sold the van and drove it into the ground i dont owe the revenue the vat because there is no sale.what i need to know is,legally do you have to charge vat on the sale of a second hand commercial vehicle

    Exactly, if you drove it into the ground you would of been the only person to benifit from claiming back the VAT. The next fella who buys it cannot benifit from this, as he isn't registered for VAT. And if you were to charge the VAT< then you would be making a profit. Is isn't there to make a profit, it's there to help you in the time you owned the vehicle.


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    #11
    fm
    Registered Users Posts: 669 ✭✭✭fm


    Limerick-man wrote: »
    Exactly, if you drove it into the ground you would of been the only person to benifit from claiming back the VAT. The next fella who buys it cannot benifit from this, as he isn't registered for VAT. And if you were to charge the VAT< then you would be making a profit. Is isn't there to make a profit, it's there to help you in the time you owned the vehicle.

    i am not trying to make a profit on charging the vat and keeping it myself,i need to know can i sell it for say 10000 euros or 12100 euros inc vat and give the govt 2100.


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    #12
    L-M
    Registered Users Posts: 23,694 ✭✭✭✭L-M


    fm wrote: »
    i am not trying to make a profit on charging the vat and keeping it myself,i need to know can i sell it for say 10000 euros or 12100 euros inc vat and give the govt 2100.

    You sell it for 12100, and give them back the 2100. You can sell it for 10,000 if you like, and out of that, give them back 1700 if you want:P


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    #13
    fm
    Registered Users Posts: 669 ✭✭✭fm


    yea i know dealers charge vat but on the likes of second hand parts and furniture there is no vat charged


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    #14
    Gurgle
    Closed Accounts Posts: 5,064 ✭✭✭Gurgle


    fm wrote: »
    no i dont think it works that way.i dont owe them vat because i already claimed it back,its my right to have claimed it back because i am vat registered.for example,if i never sold the van and drove it into the ground i dont owe the revenue the vat because there is no sale.what i need to know is,legally do you have to charge vat on the sale of a second hand commercial vehicle

    Whatever you sell it for you have to charge VAT.

    But (careful now) you could 'sell' it really cheap and pay much less VAT.(Check if the buyer is registered / can claim VAT back)


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    #15
    L-M
    Registered Users Posts: 23,694 ✭✭✭✭L-M


    fm wrote: »
    yea i know dealers charge vat but on the likes of second hand parts and furniture there is no vat charged

    I think there's a difference between a couch and a vehicle. Again i see your point, but i'm nearly a 100% you have to pay it back before selling it.


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    #16
    fm
    Registered Users Posts: 669 ✭✭✭fm


    Gurgle wrote: »
    Whatever you sell it for you have to charge VAT.

    But (careful now) you could 'sell' it really cheap and pay much less VAT.(Check if the buyer is registered / can claim VAT back)

    put the cash under the bed id say,dont want to do that though


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    #17
    cmore
    Registered Users Posts: 21 ✭cmore


    I asked my accountant about this a few months back. He told me a common practice when you are vat registered and are selling to an unregistered person is to arrange a deal with the buyer to pay you 70% of the asking price by cheque / BD and the 30% in cash. So you only put the 70% through the books as a sale thus paying back less vat.

    This is just an FYI. I am not condoning this practice in any way.:)


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    #18
    Savman
    Closed Accounts Posts: 8,323 ✭✭✭Savman


    I think it goes without saying (but I'll say it anyway) that you should be very careful taking or in fact giving tax advice on a public web board. If in doubt, refer to Revenue.

    I doubt they'll accept "the lads on boards said it was grand" as a plausible defense.


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    #19
    hi5
    Registered Users Posts: 3,105 ✭✭✭hi5


    Savman wrote: »
    Jesus, I missed that in the budget :eek:

    21.5% now.


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    #20
    cmore
    Registered Users Posts: 21 ✭cmore


    Savman.

    I totally agree with you, if in doubt refer to Revenue FM


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    #21
    mickdw
    Registered Users Posts: 23,367 ✭✭✭✭mickdw


    You defo have to pay it back. For example, if you buy a new van and sell it a year later, you would have the van free if you didnt have to pay the vat back.
    There is not the great advantage in being vat registered that most people think unless you run the thing into the ground.
    There may be a certain age of vehicle which revenue regards as having passed its useful life but certainly at 2 years old, this is not the case.
    If you sell to a business, they will claim this vat back again. If you sell to a private person, they have to pay the full price exactly like buying a new vehicle. However seeing as that private person cannot claim vat they would not be interested in the vat amount charged so Im sure some people are returning amounts based on a very rough high mileage example of the van in question. This is vat fraud though and revenue take a very serious view of vat fraud!


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    #22
    cormie
    Registered Users Posts: 20,836 ✭✭✭✭cormie


    hi5 wrote: »
    21.5% now.

    Not yet ;)


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    #23
    Victor
    Registered Users Posts: 78,432 ✭✭✭✭Victor


    There a rule something along the lines of "if you reclaim VAT on purchase of the vehicle, you must charge VAt on its disposal".

    A quick call to Revenue should sort it out.


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    #24
    Seth Brundle
    Moderators, Politics Moderators Posts: 39,846 Mod ✭✭✭✭Seth Brundle


    cmore wrote: »
    I asked my accountant about this a few months back. He told me a common practice when you are vat registered and are selling to an unregistered person is to arrange a deal with the buyer to pay you 70% of the asking price by cheque / BD and the 30% in cash. So you only put the 70% through the books as a sale thus paying back less vat.

    This is just an FYI. I am not condoning this practice in any way.:)
    Thats VAT fraud and therefor illegal!

    I also can't see it working anyhow - surely the buyer would want to keep the 30% cut to keep quiet about the fraud!


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    #25
    Woodgate
    Registered Users Posts: 774 ✭✭✭Woodgate


    Limerick-man wrote: »
    I think there's a difference between a couch and a vehicle. Again i see your point, but i'm nearly a 100% you have to pay it back before selling it.
    No you don't.

    If he's selling the van which was bought through or by the business, then he is selling an asset, if it's all legit and going through the books he has to charge the VAT.

    When you buy a new van you get the VAT back straight away, the full amount. You do not have to pay the Revenue/VAT man money before you sell you van or any asset. You include VAT in the price and pay it in your vat return.

    If he's selling privately and nothing to do with the business, then its a straight deal.


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    #26
    L-M
    Registered Users Posts: 23,694 ✭✭✭✭L-M


    So, technically what your saying is, i go off and buy a new jeep commercial we'll say for 50000, and claim back the VAT. That jeep is now standing me 41,000 euro's odd. So then i decide to sell it for what it's worth a month or so later, lets fay 48,000. So now i've just pocketed 7,000euro? Doesn't sound right to me, unless i've taken you up wrong.


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    #27
    Gurgle
    Closed Accounts Posts: 5,064 ✭✭✭Gurgle


    Woodgate wrote: »
    When you buy a new van you get the VAT back straight away, the full amount. You do not have to pay the Revenue/VAT man money before you sell you van or any asset. You include VAT in the price and pay it in your vat return.

    If he's selling privately and nothing to do with the business, then its a straight deal.

    If he didn't buy it privately, he can't sell it privately.

    OP, Theres all kinds of dodges open to you, many of which fall short of tax evasion.

    Talk to an accountant.


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    #28
    Savman
    Closed Accounts Posts: 8,323 ✭✭✭Savman


    Limerick-man wrote: »
    So, technically what your saying is
    ...don't take anyone's word for it because the consequences are fairly serious. Ring your regional tax office.


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