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...what's with the mini-budger VAT u-turn...?

  • 08-05-2009 12:18am
    #1
    galwaytt
    Registered Users, Registered Users 2 Posts: 12,822 ✭✭✭✭


    ...I don't get it.

    For months/years, dealers have moaned about the VAT situation on trade-ins (which I agree was cock-eyed, btw........).

    Today, in the actual Finance Bill, despite the change announced in the Budget, Lenehan did a u-turn, citing 'the industry' had now told him the change would not now be in the 'best interest of the industry'...

    WTF ?

    You lobby for something, you get it. And then you lobby against it, to change your mind ??

    Ode To The Motorist

    “And my existence, while grotesque and incomprehensible to you, generates funds to the exchequer. You don't want to acknowledge that as truth because, deep down in places you don't talk about at the Green Party, you want me on that road, you need me on that road. We use words like freedom, enjoyment, sport and community. We use these words as the backbone of a life spent instilling those values in our families and loved ones. You use them as a punch line. I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the tax revenue and the very freedom to spend it that I provide, and then questions the manner in which I provide it. I would rather you just said "thank you" and went on your way. Otherwise I suggest you pick up a bus pass and get the ********* ********* off the road” 



Comments

  • #2
    CharlieCroker
    Registered Users, Registered Users 2 Posts: 8,451 ✭✭✭CharlieCroker


    It's madness not to get rid of it.
    When I was in the trade it was a pain in the hole, especially doing a washout transfer on something that was in negative equity. the '02 Freelander was still costing €20k in the eyes of the taxman


  • #3
    Skyuser
    Closed Accounts Posts: 1,680 ✭✭✭Skyuser


    I don't get it, whats it in plain english


  • #4
    pred racer
    Registered Users, Registered Users 2 Posts: 4,384 ✭✭✭pred racer


    +1
    would someone in the trade like to explain what the situation is re vat and what the change was supposed to be?

    From someone who presumes the tax on his pay packet is right:o I haven't a clue about ths stuff.


  • #5
    Kartale
    Closed Accounts Posts: 167 ✭✭Kartale


    My understanding of it is; when a garage buys in a car @ say 10k or has a trade in standing 10k and they sell it for less than the cost value say 8k they must pay the VAT on the original cost amount


  • #6
    vectra
    Registered Users, Registered Users 2 Posts: 15,626 ✭✭✭✭vectra


    Kartale wrote: »
    My understanding of it is; when a garage buys in a car @ say 10k or has a trade in standing 10k and they sell it for less than the cost value say 8k they must pay the VAT on the original cost amount

    Correct.
    Thats what a buddy of mine in the trade told me recently.


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  • #7
    TomMc
    Registered Users, Registered Users 2 Posts: 1,616 ✭✭✭TomMc


    Plus I think some give a large discount (say 2-4K) off the list price of a new car rather than a higher trade in allowance on the old one, so as to reduce the amount of VAT due. At least that is how it is recorded as the cost to change figure is all that really counts to the customer.

    Is / was there something that VAT wasn't payable on second hand cars below 10K? or were reductions made as above just to lower their liability?


  • #8
    Kartale
    Closed Accounts Posts: 167 ✭✭Kartale


    No, Vat is due on all cars regardless of amount.
    Not too sure that discounts really matter as the original cost of the car is what vat is due on & obviously cost cant change


  • #9
    PaddyFagan
    Registered Users, Registered Users 2 Posts: 1,146 ✭✭✭PaddyFagan


    Not that it clears it up much, but there was an article about this in yesterdays times:
    http://www.irishtimes.com/newspaper/motors/2009/0506/1224245988428.html

    Paddy


  • #10
    niceirishfella
    Closed Accounts Posts: 5,538 ✭✭✭niceirishfella


    galwaytt wrote: »
    ..WTF ?

    You lobby for something, you get it. And then you lobby against it, to change your mind ??

    in fairness to dealers, the did'nt have a crystal ball to see the massive hole/dip/collapse coming when they were lobbying. It was in many peoples eyes going to stay rosey in the garden for a long time.


  • #11
    TomMc
    Registered Users, Registered Users 2 Posts: 1,616 ✭✭✭TomMc


    Kartale wrote: »
    No, Vat is due on all cars regardless of amount.
    Not too sure that discounts really matter as the original cost of the car is what vat is due on & obviously cost cant change

    OK right, but still on a second hand car (trade-in) the cost or value of same can vary greatly.


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  • #12
    Kartale
    Closed Accounts Posts: 167 ✭✭Kartale


    Your correct, but i mean the cost of a particular car cant change. 2 different 2005 Focus can cost different amounts but the cost of Car X is the cost, this cant change unless cost goes up due to repairs


  • #13
    seasam
    Closed Accounts Posts: 146 ✭✭seasam


    This is the way I understand it If a gargae has a car costing 10,000 and they sell it for 12,000 they pay VAT on the 12,000 If they sell the car at a loss for 8,000 they have to pay VAT on the 10,000 that it's costing them not the price they sold it at a loss for which would be 8,000 so they have to pay VAT on 2,000 that they didn't make !!! clear as mud


  • #14
    CharlieCroker
    Registered Users, Registered Users 2 Posts: 8,451 ✭✭✭CharlieCroker


    Its not the easiest to explain but i'll try

    If i traded in a car and had it costing me €10k, i paid VAT on the 10k, even if I sold it for €11k.

    The main problem was if there was finance outstanding on the car.

    E.G. I trade in a car that has €15k outstanding finance on it but the car is only worth €10k. The car has to be costed at €15k cos thats the cheque that has to written to the finance company to settle the outstanding finance. Normally what we would do is a "washout transfer" which transfers the €5k from the new car to trade-in which brings it back down to €10k. problem is, the taxman still sees the value of the trade-in as the origional €15k
    What this means is that your paying VAT on the extra €5k even though you don't have it!!!!!

    Hope that's a bit clearer!!!!!:D


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