Vat on a UK car query

Cyrus · 01-12-2008 3:20pm #1

Friend of mine bought a co car in the uk, demo model volvo something or other

passenger vehicle

he bought it at the vat exclusive price, now he obviously owes the irish vat on it, but he seems to think he will get away with it and asked me when is anyone going to find out?

can any boardsie enlighten as to when it will become apparent

robbie99 · 01-12-2008 3:27pm

Well if he blatantly wants to evade tax let him try and keep us informed on how revenue succer him.

Brewster · 01-12-2008 3:29pm

Well sure he has to pay VRT on it and it will become apparent then, unless of course he doesnt plan to pay that tax either!

unkel · 01-12-2008 3:31pm

And no high horses here please. OP just wants to find out if / when his friend will be found out. I'd like to know that myself too

Cyrus · 01-12-2008 3:35pm

as unkel said,

i dont really care about the ethics of the thing, im convinced he will be caught if he doesnt pay it, so i want to be able to say to him at what point that will occur so that he will pay :P

there must be an answer, im sure he had to give a vat number to get the car at the vat excl price, would that red flag the revenue?

NewApproach · 01-12-2008 3:40pm

Without actually knowing the facts, I would imagine they would find out VAT is owed on is once the VRT is paid and the Irish authorities send the export form to the DVLA. I would guess the DVLA would tell them VAT is due.

Actually thinking about it probably not, its none of their business.

And thats assuming he is paying the VRT, which he probably wont!!

Lex Luthor · 01-12-2008 3:46pm

so when you declare your car for VRT, do they also ask if VAT was paid?

AFAIK, any car under 6 months old is queried and you have to prove it has been paid, but I could be wrong

robbie99 · 01-12-2008 3:47pm

Cyrus wrote: »

Friend of mine bought a co car in the uk, demo model volvo something or other

How did he get it VAT free? Did he use his company's VAT number? Or fill in form VAT 411 with the dealer?

Cyrus · 01-12-2008 3:52pm

NewApproach wrote: »

Without actually knowing the facts, I would imagine they would find out VAT is owed on is once the VRT is paid and the Irish authorities send the export form to the DVLA. I would guess the DVLA would tell them VAT is due.

Actually thinking about it probably not, its none of their business.

And thats assuming he is paying the VRT, which he probably wont!!

he will pay the vrt alright he seems to think the vat will go unnoticed

im sure it wont but i cant say for definate why?

01-12-2008 4:07pm

I think the only way to get around this is to hold off paying the vrt until its over 6 months old. Then he will not be liable for vat. He may have to put 6000 kms on the clock too but im not sure if you need it to be both 6 months old and have 6k on the clock or if being 6months old is enough to meet the criteria for not paying the vat.

Cyrus · 01-12-2008 4:09pm

but surely you cannt buy ex vat in the uk and not pay the vat here, no matter what you do

01-12-2008 4:14pm

Cyrus wrote: »

but surely you cannt buy ex vat in the uk and not pay the vat here, no matter what you do

I know where your coming from but I would imagine that its the age of the car(i.e less than 6 months) that is flagged by the VRO and that would start the process of them looking for the vat to be paid. If its over the 6 months would they not just continue on and presume that the vat has been paid in the UK?

Brewster · 01-12-2008 4:25pm

Its a tricky one.... If you bought a borderline 6 month old car with borderline 6k km on it and didnt pay UK VAT by using form 411 and VRTed a month later I dont what position would be? I dont know.... Do Her Majesty's tax people get in touch with Revenue to inform them a car was sold to Rep ex of VAT?? Who knows....

leon8v · 01-12-2008 5:14pm

Is the car under 6 months old? If it is the way you are suppossed to do it is as follows:
When you bring it in, you are liable to pay VRT and VAT on it. The VAT due is calculated based on the purchase price, this will be the VAT exclusive price paid for the vehicle per the invoice. If VAT was paid on the original purchase price in the other member EU state (Uk in this case) then the original seller in the UK should refund you the VAT once you send proof of the VAT payment in Ireland to them and they are able to claim it back so they are all square.

In this case however, he has gotten away with out paying VAT on the car in the UK which isnt a major deal as he would have gotten it back anyway once he pays VAT here. However, if he can avoid the Customs people until the car is 6 months old and has 6000km on it.

* The revenue definition of what they call "new means of Transport" in relation to cars is ........ Has travelled 6000km or less or is 6 months old or less.........

They underline the word "or" in their definition too. I would take that to mean that if it either has 6000 or less or is 6 months old or less it is liable so I would be making sure it has more than 6000km and is more than 6 months old.

So to answer your original question, if he brings the car to the VRT office and its over 6 months old and has more than 6000km on it, he will not have to pay VAT and IMO never will!!!!!

copacetic · 01-12-2008 5:18pm

leon8v wrote: »

So to answer your original question, if he brings the car to the VRT office and its over 6 months old and has more than 6000km on it, he will not have to pay VAT and IMO never will!!!!!

The invoice he got will state the date of purchase, this is the date the revenue use to determine the car age. It would have to be less than 6 months to avoid UK vat, so he will have to pay it here.

He would also have had to sign the form in UK saying he was going to pay the VAT in Ireland. However that doesn't matter, the revenue don't care whether he paid VAT or not. They just know that if car was under 6 months old or had less than 6000kms on it, then he shouldn't have paid VAT in uk and will have to pay it here.

There are apparently examples of people who have gotten away with it when the person they deal with doesn't even look at the invoice though...

NewApproach · 01-12-2008 5:19pm

How could he buy the car ex-VAT anyway without beying it new?

In which case how will he put 6000kms on it? Long dyno run maybe...

copacetic · 01-12-2008 5:27pm

NewApproach wrote: »

How could he buy the car ex-VAT anyway without beying it new?

In which case how will he put 6000kms on it? Long dyno run maybe...

The VAT rules are EU wide. If car is less than 6 months old or less than 6000kms it is considered 'new' in the UK for not paying VAT and here for paying VAT.

From UK details:

A motorised land vehicle is not new

when more than 6 months have elapsed since the date of its first entry into service (see paragraph 2.3), and
it has, since its first entry into service, travelled under its own power for more than 6000 kilometres.

first entry into service:

For motorised land vehicles it is the earlier of

the date it was first registered for road use in the Member State of manufacture, or
the date when it was first liable to be registered for road use there.

leon8v · 01-12-2008 5:28pm

copacetic wrote: »

The invoice he got will state the date of purchase, this is the date the revenue use to determine the car age. It would have to be less than 6 months to avoid UK vat, so he will have to pay it here.

He would also have had to sign the form in UK saying he was going to pay the VAT in Ireland. However that doesn't matter, the revenue don't care whether he paid VAT or not. They just know that if car was under 6 months old or had less than 6000kms on it, then he shouldn't have paid VAT in uk and will have to pay it here.

There are apparently examples of people who have gotten away with it when the person they deal with doesn't even look at the invoice though...

The revenue will not use the date of purchase to determine the cars age, the V5 will determine the cars age. The OP states its a demo so I assume it was already registered in the UK prior to him buying it.
If I was the OP's mate and was trying to get away without paying the VAT (I am not condoning it here before anyone jumps on me just saying) I wouldnt be bringing in the invoice with me, that is assuming he got one.

Brewster · 01-12-2008 5:32pm

Does anyone know the exchange rate Revenue would use in calculating what VAT is due on Uk cars less than 6 months old?

copacetic · 01-12-2008 5:32pm

leon8v wrote: »

The revenue will not use the date of purchase to determine the cars age, the V5 will determine the cars age. The OP states its a demo so I assume it was already registered in the UK prior to him buying it.
If I was the OP's mate and was trying to get away without paying the VAT (I am not condoning it here before anyone jumps on me just saying) I wouldnt be bringing in the invoice with me, that is assuming he got one.

I checked this with the revenue this month and they said if the car is around the 6 months time period they will want an invoice to check the actual date.

Failing this, they will contact the UK to see if the dealer claimed the VAT back on form 411 and that you signed it declaring you would pay the VAT in Ireland.

robbie99 · 01-12-2008 5:35pm

When I was bringing my car in I guess I was also wondering if it was possible to avoid the Irish VAT and I was for asking clarification on how the six months was determined. I got the following reply from revenue...

It should be noted that in calculating the length of time since first registration in another MS, the critical date is the date on which the vehicle was supplied in the other MS, i.e. the date of the purchase invoice. Delaying registration in the State until six months or more after entry into service does not remove the liability to VAT. It is the date of supply and not the date of declaration that determines liability to VAT.

robbie99 · 01-12-2008 5:38pm

Brewster wrote: »

Does anyone know the exchange rate Revenue would use in calculating what VAT is due on Uk cars less than 6 months old?

Back in July I asked that question to Revenue. The reply I got...

Usually VAT is based on the Original Net Sterling Invoice Value converted to Euro at the prevailing Revenue Excise Exchange Rate set each Month - this Month's Sterling Rate is .8034.

EDIT: In case people go cross referencing the exchange rates it was actually back in May when I was asking!

Brewster · 01-12-2008 5:43pm

robbie99 wrote: »

Back in July I asked that question to Revenue. The reply I got...

Thanks Robbie. I should have known that you wouldnt get best rate possible!! Do u have a link where u can monitor that exchange rate?

Brewster · 01-12-2008 5:49pm

robbie99 wrote: »

Back in July I asked that question to Revenue. The reply I got...

EDIT: In case people go cross referencing the exchange rates it was actually back in May when I was asking!

http://www.revenue.ie/index.htm?/services/elecserv/euroserv/eurcon1.htm

Was wondering ok Robbie, quite a decent exchange rate now...

Brewster · 01-12-2008 5:50pm

If the government lowered VAT here it would only make it more attractive to buy new in Uk!

robbie99 · 01-12-2008 6:01pm

Brewster wrote: »

If the government lowered VAT here it would only make it more attractive to buy new in Uk!

And by buying new in the UK, Irish government gets the full VAT and VRT. It's only the older imports where Ireland loses out on the tax revenue.

robbie99 · 01-12-2008 6:04pm

Brewster wrote: »

http://www.revenue.ie/index.htm?/services/elecserv/euroserv/eurcon1.htm

Good spot Brewster! BTW I don't have any reference but AFAIK if you can show revenue what exchange rate you had used for the transaction, revenue will take your rate rather than their declared rate.

mickdw · 01-12-2008 6:13pm

I honestly dont think the revenue vrt guys are very clued in. If the car passes over 6 months & 6000 miles after purchasing vat free in uk, there is a good chance you could get away with it. I wouldnt try it though. That would be VAT fraud.

I wonder if some of the private sellers here selling uk cars still on the english plate might have bought them less VAT and try to sell them here to unsuspecting private man who then takes it in to revenue genuinely ready to pay the vrt only to be told that VAT is due and that he owes them twice as much as he thought while original private seller is long gone.

01-12-2008 6:24pm

mickdw wrote: »

I wonder if some of the private sellers here selling uk cars still on the english plate might have bought them less VAT and try to sell them here to unsuspecting private man who then takes it in to revenue genuinely ready to pay the vrt only to be told that VAT is due and that he owes them twice as much as he thought while original private seller is long gone.

It would be possible but I would imagine the number of cars bought in the UK less than 6 months old and then sold here were very few in number. Any car that was over the 6 months couldnt have been bought vat free in the UK so I wouldnt think it would have been an issue.

Goodluck2me · 01-12-2008 6:57pm

mickdw wrote: »

I honestly dont think the revenue vrt guys are very clued in. .

You couldn't be more wrong! Ruthless is a word which springs to mind.

Padraig Mor · 01-12-2008 11:23pm

robbie99 wrote: »

Back in July I asked that question to Revenue. The reply I got...

EDIT: In case people go cross referencing the exchange rates it was actually back in May when I was asking!

I believe you can also use the exchange rate at which you purchased if you can prove the total it cost you in euro (incl. currency conversion fees).

Vat on a UK car query

Comments