VAT Question

moggie4000

Hi Guys,

I have a VAT query which i'm not sure about.

I have purchased a machine privately for my business and paid cash for it, there was no VAT included. I now have a local club looking to buy the machine from me and i'm not sure whether i have to charge VAT on the machine. My initial thoughts would say that i don't charge them VAT but i'm just not sure.

Hope you can help.

Moggie

ssbob

moggie4000 wrote: »

Hi Guys,

I have a VAT query which i'm not sure about.

I have purchased a machine privately for my business and paid cash for it, there was no VAT included. I now have a local club looking to buy the machine from me and i'm not sure whether i have to charge VAT on the machine. My initial thoughts would say that i don't charge them VAT but i'm just not sure.

Hope you can help.

Moggie

You must charge VAT Moggie unless the club is VAT exempt or you are not registered for VAT. Why weren't you charged VAT?

moggie4000

I wasn't charged VAT as it was a private sale. I am VAT registered. Thanks for the reply

srsly78

What do you mean by private sale? You mean it was not through the company right? Then they should have charged you VAT since private individuals are not exempt. Thus transaction was illegal in the first place.

If this machinery now somehow makes it onto your books you may be asked questions like where it came from etc, how will you explain all this whilst hiding illegality?

moggie4000

srsly78 wrote: »

What do you mean by private sale? You mean it was not through the company right? Then they should have charged you VAT since private individuals are not exempt. Thus transaction was illegal in the first place.

If this machinery now somehow makes it onto your books you may be asked questions like where it came from etc, how will you explain all this whilst hiding illegality?

By private sale i mean it was bought from a private individual who would only accept cash as means of payment. I have put it through the company. I am a sole trader so i don't think your right in saying thats it's an illegal transaction!

jimmynokia

YOU can take the total price as vat included and claim it back or sell it for same inclusive of vat

DubTony

What's all this nonsense about illegality?
I'm assuming the OP brought the item from somebody who was not registered for VAT. Therefore no VAT.
If the seller was VAT registered, and didn't want to show it, it was up to the OP to agree a price that suited that particular environment, but there's no legal obligation on the OP as a buyer. He can also show the item on his books as a legitimate purchase. If he's ever questioned about it, he just gives the details.

As for selling the item, OP, you ARE required to charge VAT as a VAT registered business.

moggie4000

DubTony wrote: »

What's all this nonsense about illegality?
I'm assuming the OP brought the item from somebody who was not registered for VAT. Therefore no VAT.
If the seller was VAT registered, and didn't want to show it, it was up to the OP to agree a price that suited that particular environment, but there's no legal obligation on the OP as a buyer. He can also show the item on his books as a legitimate purchase. If he's ever questioned about it, he just gives the details.

As for selling the item, OP, you ARE required to charge VAT as a VAT registered business.

Thank you for your sensible answer.

ssbob

DubTony wrote: »

What's all this nonsense about illegality?
I'm assuming the OP brought the item from somebody who was not registered for VAT. Therefore no VAT.
If the seller was VAT registered, and didn't want to show it, it was up to the OP to agree a price that suited that particular environment, but there's no legal obligation on the OP as a buyer. He can also show the item on his books as a legitimate purchase. If he's ever questioned about it, he just gives the details.

As for selling the item, OP, you ARE required to charge VAT as a VAT registered business.

+1 here DubTony.

OP, please ignore comments made by jimmynokia and srsly78, they are factually incorrect.

moggie4000

ssbob wrote: »

+1 here DubTony.

OP, please ignore comments made by jimmynokia and srsly78, they are factually incorrect.

Thanks

antoinolachtnai

You probably have to charge vat. However it is a technical point and you should speak to an accountant about it. There is something called the margin scheme which might be applicable.