Do you ever go for 'Cash'

keithclancy

Just picked up a reconditioned alternator for my V50, going to replace it today and unfortunately the weather is against me.

The Do it yourself Garage is also closed

Was a bit surprised, the place is quite large, like not a mickey mouse operation and the guy offered to let me pay in cash (minus the tax) or pay with card and pay the tax.

140 vs 169 with tax.

I paid in Cash.

What would you do ?

mgbgt1978

If you're not in a position to claim back the Tax......;)

Supraman

Cash all day long . Govt have enough of my money

Atlantic Dawn

Pay in cash, more money left for me to blow on petrol

Id have wanted more off for cash, both yourself and the revenue receivers are being fleeced on those terms imo.

George Dalton

Supraman wrote: »

Cash all day long . Govt have enough of my money

They don't though. In fact they are seriously short of money. Why should VAT only apply to other people and not you?

keithclancy

RoverJames wrote: »

Id have wanted more off for cash, both yourself and the revenue receivers are being fleeced on those terms imo.

IMO I thought 140 euros (with exchange) was a pretty good price.

Cheapest I could find was 185 pounds from the UK with exchange for a refurb.

New they go for about 270 euros.

Volvo were quoting 890 euros parts and labour :eek:

I was thinking in terms of profit margin for the seller, he's doing much better on the cash terms.

Colonel Sanders

RoverJames wrote: »

I was thinking in terms of profit margin for the seller, he's doing much better on the cash terms.

So is the buyer. He saved 29 quid....

dudara

Bizarrely, the garageman is shooting himself in the foot. He's paying VAT on goods & services he buys, and if he charges VAT on his sales, then he can offset the output and input VAT (assuming that he's properly registered).

djimi

Whether or not the garage declares the tax on the sale is not my problem. If Im offered a cheaper price for cash then Ill take it. What he does with that money after Im gone is his own business.

Voodoomelon

dudara wrote: »

Bizarrely, the garageman is shooting himself in the foot. He's paying VAT on goods & services he buys, and if he charges VAT on his sales, then he can offset the output and input VAT (assuming that he's properly registered).

Not at all.
What happened is that he is no doubt registered for VAT and just didnt put it through the till, simply offering the customer the total amount less VAT.

He pockets the entire amount of his profit, doesn't pay a cent of income tax on it and the Revenue get nothing.

Henry Ford III

dudara wrote: »

Bizarrely, the garageman is shooting himself in the foot. He's paying VAT on goods & services he buys, and if he charges VAT on his sales, then he can offset the output and input VAT (assuming that he's properly registered).

I suspect the cash sale won't feature on the books.

dudara

By not putting it through the till, he's not availing of the chance to offset the output VAT from the sale agains the input VAT on his purchases. He must be declaring some VAT to the Revenue, so why lose out on credits by keeping some sales off the book?

Voodoomelon

dudara wrote: »

By not putting it through the till, he's not availing of the chance to offset the output VAT from the sale agains the input VAT on his purchases. He must be declaring some VAT to the Revenue, so why lose out on credits by keeping some sales off the book?

I know what you're saying, but this is a reconditioned alternator. He no doubt got it for near free, reconditioned it and sold it for a massive profit, returning no VAT or income tax.

Even if he had purchased it, including VAT, he's still much better off taking cash and not running it through the till as he pays not a cent of income tax on it.

Henry Ford III

dudara wrote: »

By not putting it through the till, he's not availing of the chance to offset the output VAT from the sale agains the input VAT on his purchases. He must be declaring some VAT to the Revenue, so why lose out on credits by keeping some sales off the book?

VAT paid on the purchase can still be claimed. Goods bought and sold (and the VAT thereon) aren't linked for accounting purposes.

An undeclared cash sale therefore can be a loss to Revenue of VAT on the sale, and potential income/corporation tax on any profit.

Sobanek

Ah, the alternator is a ****ty job. Seriously, you should get someone to do it, unless you're really skilled. It took my mechanic about an hour to do it (he did it at my house though).

Source: My own experience with a V50...

Conmaicne Mara

George Dalton wrote: »

Why should VAT only apply to other people and not you?

Because the system allows people get away with it, simple as that.

I'd happily pay cash too.

Colonel Sanders

Colonel Sanders wrote: »

So is the buyer. He saved 29 quid....

Indeed he did but as the seller's margin increases substantially by having an off the books transaction I would as mentioned have thought the €29 saving wasn't as much as it should be.

So where you seem to think the buyer is doing "much better", I don't

As detailed by other posters the seller is saving on income tax etc etc etc.

pajo1981

Conmaicne Mara wrote: »

Because the system allows people get away with it, simple as that.

I'd happily pay cash too.

Fiscal conservative or confused shinner?

Conmaicne Mara

Tight bastard so I guess it's the former.