Claiming vat back on second hand vehicles?

123donalo

I recently went to purchase a 05 transit van from a garage and asked if price included vat. He said yes but that he couldnt actually charge vat on a second hand van and that I wouldnt be able to claim vat back from revenue as they no longer allow this. If I did claim it back and if I ever had an audit I would be made pay it back and also fined.
Can somebody please clarify what he is saying?

Immy

Well if he's not charging VAT then you can't claim it. There is a special system in place for second hand vehicles where a vehicle can be taken out of the VAT net.

123donalo

Immy wrote: »

Well if he's not charging VAT then you can't claim it. There is a special system in place for second hand vehicles where a vehicle can be taken out of the VAT net.

Whats the special system?

Alan Shore

As a rule the special scheme applies to car as the seller does not charge the dealer VAT. It does not normally apply to commercial vehicles as the seller is usually able to charge the dealer VAT.

It may be the case that the person who sold the van to the dealer was not registered for VAT. If the van your looking at is 23% cheaper than at average van that you could recover VAT On then that's the answer.

dbran

http://www.revenue.ie/en/tax/vat/leaflets/margin-scheme-second-hand-goods.html#section21

123donalo

Alan Shore wrote: »

As a rule the special scheme applies to car as the seller does not charge the dealer VAT. It does not normally apply to commercial vehicles as the seller is usually able to charge the dealer VAT.

It may be the case that the person who sold the van to the dealer was not registered for VAT. If the van your looking at is 23% cheaper than at average van that you could recover VAT On then that's the answer.

I think the vehicle should have a vat receipt as I have checked history and it was owned by eircom from new until now. Comes with full service history all by eircom but price sounds like it should have vat included (€5500). Dealer said there is no vat!?

123donalo

dbran wrote: »

http://www.revenue.ie/en/tax/vat/leaflets/margin-scheme-second-hand-goods.html#section21

I think this Margin scheme could explain exactly whats going on but surely then the price should be 23% less?

Martin567

123donalo wrote: »

I think this Margin scheme could explain exactly whats going on but surely then the price should be 23% less?

Certainly if not charging VAT on the van, the price should be less. Otherwise the dealer is just making extra profit. It would be unusual (if possible at all) for a commercial vehicle to have anything to do with the margin scheme.

123donalo

But even if I go elsewhere to purchase why did he say I cannot claim vat back on any second hand van I buy or I will be made pay it back and fined???

Martin567

123donalo wrote: »

But even if I go elsewhere to purchase why did he say I cannot claim vat back on any second hand van I buy or I will be made pay it back and fined???

Doesn't make sense to me. If it's a commercial vehicle, it should have VAT charged on it which you should be able to claim back.

jacob2

do u have to pay vat on a 13 year old van?