2012 vat on new car

pale rider

I've paid a deposit on a new car for delivery sometime in January, the garage have written up an invoice but I have not got this yet., I had agreed a price and paid a deposit before the Budget and the VAT increase and the dealer told me that my price could go up if VAT was increased in the budget.

Thinking more about this I believe I have a contract entered into when the VAT rate was 21%, I will pay the remaining monies for the car when it is delivered in January, my question is who is right, me saying 21% or the garage who may say 23%, I don't believe I am liable to the increased VAT.

I am self employed and If I invoice my customer today at 21% VAT and they do not pay me until say the end of January then we're all square...I cannot ask for extra 2%...?

Drummerboy08

There is a way for a dealer to complete the deal in 2011 but supply the car in 2012 thus avoiding the VAT increase, but I'm not up to speed on it.

Talk to your dealer though, they will try to work with you to avoid the increase. They won't see any of the extra 2% anyway, so it's in their interest to help you out.

bridster007

Think they can get away with 21% Vat if they have the chasis number before end of year. But if you ordered a car that is not actually built yet you may be out of luck.

Check some UK websites on this as they had similar situation a few years back and then discuss with dealer. Some small dealers may not know all the details.

Your increase won't be 2%, it will be 1.65%. Think the effect on you should be based on the net price after trade-in, not gross price of the new car but not too sure.

pale rider

Curious what effect having the chassis number will have and was sure it was 2%, how are you calculating it as less ?

Drummerboy08

pale rider wrote: »

Curious what effect having the chassis number will have and was sure it was 2%, how are you calculating it as less ?

If the dealer has a chassis number he can invoice the car. Obviously he won't have a reg number, so the chassis number is the usual alternative to identify a car.

Yakuza

In my case, where a trade in is involved, I'm only being charged the extra vat on the cost to change, as my trade in will have gone up in value too due to its VAT content. I will probably fork over half of the cost this month, so I'll only pay the new rate on the balance paid when I take devlivery.

mbiking123

I am getting a new car and I was told a few weeks back that VAT may be increased and I should factor that cost in

The 2% is my problem as far as my dealer is concerned and that is what we agreed on. He made no offer of pay now to save on the increase

245

Drummerboy08 wrote: »

If the dealer has a chassis number he can invoice the car. Obviously he won't have a reg number, so the chassis number is the usual alternative to identify a car.

Do you just need the invoice issued or does money have to change hands?

Paddy001

245 wrote: »

Do you just need the invoice issued or does money have to change hands?

Just an invoice, it could be paid when you want then but invoice would have to be issued now at 21% VAT

knifey_spoonie

The only legal way to avoid the VAT increase is to have the all monetary transactions completed before the end of the year. So if you have a trade-in it must have changed hands before 1-1-12, The same goes for any money that need to change hands, it must be lodged with the garage before the end of the year.

BTW: This is not my reading of Taxation law, it has come from the Revenue Commissioners.

kildare.17hmr

your still going to be hit with a vrt increase as the vat going up has caused the open market selling Price to go up. Iv 2 new mini buses that iv had to invoice this side of xmas to save the customer 500 euro on vat but when i register them in Jan they will be hit with an extra 400 euro vrt compared to the original agreed Price in October

pale rider

Firstly, thanks to all for the replies....

I was lucky enough to sell my car privately so I am a cash purchaser.

Who would part with cash in full to a garage in these times when so many close overnight, pay in December and wait a couple of weeks to get your goods, no chance !!...the garage closes and my ass is out a fortune. Isn't that a tyical Revenue response to a legitimate query and it is interesting that this appears to be a unique approach exclusively to the poor motorist....as I said earlier I am self employed, I issue you with an invoice today at 21% vat, you pay me in full on that invoice in January and thats all there is to it, you do not owe me 2% more...the vat applies at date of invoice issue.

I get their problem... I think, I reckon they think rogue car dealers will back date invoices in January for new purchases, that would be wrong, I have a deposit paid, I have a contract, this is a bona fide transaction at a time when VAT is 21%

The idea of adding the chassis number to the invoice is excellent, it clearly identifies the vehicle, I'll try this unless somebody comes up with a better idea.

I hadn't considered the vrt aspect....thats for another day...;-(

kildare.17hmr

did you sign an simi order form or a vehicle order form at the time of ordering? They usually have a clause on the back to deal with open market selling prices changing. How much was the car you bought at the time you ordered it op?

bridster007

If car was 30000, net price would be 30000 / 1.21 = 24793.
Price with 23% vat would be 24793 * 1.23 = 30496.
Price up effect is 30496/30000 = 1.0165, hence 1.65 increase.

This includes VAT effect of VRT so no need to worry about VRT.

OP in original post states that garage did mention at time of doing the deal that price may change if vat rates change so that is in effect part of your contract.

The risk though is giving over money in advance and risk of garage closing. I'm not sure your payment will be treated any different in a liquidation than any other creditor, even though linked to a specific car.

mickdw

bridster007 wrote: »

The risk though is giving over money in advance and risk of garage closing. I'm not sure your payment will be treated any different in a liquidation than any other creditor, even though linked to a specific car.

I wouldnt give anything more than deposit to dealer until car is sitting on forecourt ready to drive away.

knifey_spoonie

knifey_spoonie wrote: »

The only legal way to avoid the VAT increase is to have the all monetary transactions completed before the end of the year. So if you have a trade-in it must have changed hands before 1-1-12, The same goes for any money that need to change hands, it must be lodged with the garage before the end of the year.

BTW: This is not my reading of Taxation law, it has come from the Revenue Commissioners.

Really?
So if I invoice someone in December for services carried out in December and they'll be paying me in January I need to charge them 23% VAT?

-Corkie-

RoverJames wrote: »

Really?
So if I invoice someone in December for services carried out in December and they'll be paying me in January I need to charge them 23% VAT?

Any work i am carrying out now will be invoiced this month but I wont be giving my customers the invoice until January so I will be charging them the current rate.

3DataModem

Paddy001 wrote: »

245 wrote: »

Do you just need the invoice issued or does money have to change hands?

Just an invoice, it could be paid when you want then but invoice would have to be issued now at 21% VAT

In my experience (UK) the money needs to be paid on or before 31/12.

-Corkie-

-Corkie- wrote: »

Any work i am carrying out now will be invoiced this month but I wont be giving my customers the invoice until January so I will be charging them the current rate.

I presumed all December stuff was 21% regardless of when one expected payment tbh.

bridster007

RoverJames wrote: »

I presumed all December stuff was 21% regardless of when one expected payment tbh.[/QUOTE]

It is.
By VAT law the applicable VAT on a car is the rate on the date of registration. This would be 23% if one wants a 12 reg car.
By concession it seems the Revenue are allowing cars that are already manufactured and sold, to be sold at the 21% rate if the full amount is paid in 2011. Hence the need for a chasis number.

Problem however is that I don't think ownership will have passed to the buyer until the registration is actually completed in Jan. Buyer may not be able to say to a liquidator that he owns the car but liquidator will put the payment into the general pot of money available to pay off all creditors.

I'm not 100% sure on this so if someone knows the full legal position then please correct me.

Cost of getting legal advice would be greater than the extra VAT in most cases so anyone in the situation just needs to decide whether to play safe or take the risk.

R.O.R

kildare.17hmr wrote: »

your still going to be hit with a vrt increase as the vat going up has caused the open market selling Price to go up. Iv 2 new mini buses that iv had to invoice this side of xmas to save the customer 500 euro on vat but when i register them in Jan they will be hit with an extra 400 euro vrt compared to the original agreed Price in October

Just double check that with Revenue.

Got a mail from a manufacturer last week saying that Revenue will honour the current VRT cost on vehicles registered up to the 16th January, but the increased VAT will have to be paid, unless it's invoiced and paid before the 31st December.

kildare.17hmr

R.O.R wrote: »

Just double check that with Revenue.<br />
<br />
Got a mail from a manufacturer last week saying that Revenue will honour the current VRT cost on vehicles registered up to the 16th January, but the increased VAT will have to be paid, unless it's invoiced and paid before the 31st December.

<br />
i was passed from pillar to post tryin to find out and eventually was told by vrt office. Ill look into that lad cheers because it will save me alot of headach!

Edit. Spoke to distributor they have heard nothing yet but are now looking into it