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What does VAT qualifying mean at auction? (Read 8633 times)
kman
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What does VAT qualifying mean at auction?
12.01.10 at 21:52:35
 
does it mean you have to add vat on top of the wining bid?
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rhubarb
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Re: What does VAT qualifying mean at auction?
Reply #1 - 12.01.10 at 22:08:59
 
yes, and it also means you can claim the vat back if you are a business(ie vat registered)
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Beetlefan the 1st
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Re: What does VAT qualifying mean at auction?
Reply #2 - 12.01.10 at 22:09:22
 
kman wrote on 12.01.10 at 21:52:35:
does it mean you have to add vat on top of the wining bid?


Yes,It means the Company claimed the VAT back when the car was new Wink
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Re: What does VAT qualifying mean at auction?
Reply #3 - 12.01.10 at 22:50:35
 
A vehicle is purchased by a contract hire and leasing company or a daily rental company for the sole purpose of renting it out to a customer(s) the vehicle is classified as a VAT qualifying vehicle.

The purchaser of the vehicle claims the VAT back and when they sell it at the end of its life with them it's value is plus VAT.

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kman
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Re: What does VAT qualifying mean at auction?
Reply #4 - 19.01.10 at 21:39:26
 
from bca website; seems different from views above.

VAT Qualifying Although all used cars bear VAT it is not usually accounted for separately and VAT is not generally added to the hammer price. In some circumstances (qualifying cars) the VAT element may be broken out from the hammer price and shown separately. This is done to enable a VAT registered buyer, purchasing the vehicle for a qualifying purpose, to recover the VAT. 
Commercial VAT This relates to used light and heavy commercial vehicles, plant and equipment. VAT at current rates is charged on top of the auction selling price in almost all cases. The auction rule is that all light and heavy commercial vehicles, plant and equipment are subject to VAT unless the auctioneer declares otherwise. 
Margin VAT In all other cases (margin cars) the VAT is not shown separately and cannot be recovered. Cars that are not eligible for recovery of VAT even if purchased by a VAT registered person and bought on a tax invoice are called margin cars. 
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raxx
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Re: What does VAT qualifying mean at auction?
Reply #5 - 19.01.10 at 21:52:05
 
I always thought (or understood) and led to believe that if a car was vat qualifying then a person buying it at auction who is intending it for business use could claim back the vat but it wasn't added on top of the hammer price......

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Re: What does VAT qualifying mean at auction?
Reply #6 - 19.01.10 at 22:26:23
 
kman and raxx you are both right I might have mislead people with my previous answer. Embarrassed Undecided Roll Eyes

I will try and explain it better this time.

We will start with a new car being purchased the key issue is whether this VAT can be recovered by the purchaser as there are strict rules that will block the VAT recovery.

The purchaser must be able to prove a car is not available for private use at any time even taking the vehicle home over night once would render it blocked by the HM Customs. Roll Eyes

If VAT has been fully recovered on a car that car will be VAT Qualifying.

If a qualifying car is sold VAT will be chargeable on its sale(and shown on the Auction receipt as such) and recoverable by the purchaser under the same rules as when it was new.

If there is any private use of the car no VAT at all can be recovered on the purchase of the car and it becomes what is known as “Non-Qualifying”.


Hope this makes things a bit clearer. Roll Eyes Undecided Wink Smiley
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kman
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Re: What does VAT qualifying mean at auction?
Reply #7 - 19.01.10 at 22:36:30
 
All I wanted to know is that if I buy a car at auction described as VAT qualifying, will I have to pay VAT on top of hammer price. I think the answer is no.
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Re: What does VAT qualifying mean at auction?
Reply #8 - 19.01.10 at 22:47:37
 
kman wrote on 19.01.10 at 22:36:30:
All I wanted to know is that if I buy a car at auction described as VAT qualifying, will I have to pay VAT on top of hammer price. I think the answer is no.



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