VAT on sale of machinery bought before registeration

confused03

Hi, quick question on VAT. I registered for VAT 2 years ago, a year prior to this I purchased a piece of equipment upon which I had to pay the VAT (due to not being registered at that stage). I now wish to sell this piece of equipment to a private individual who is not VAT registered, will I need to deduct VAT from the price I get for this and pay over to revenue? I can not add on the VAT to the price I am being offered as purchaser can not recover the VAT.
Thanks

dbran

Hi

If it is movable property the margin scheme may apply.

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

Otherwise yes you would have to charge vat at the appropriate rate.

Kind Regards

dbran

confused03

dbran wrote: »

Hi

If it is movable property the margin scheme may apply.

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

Otherwise yes you would have to charge vat at the appropriate rate.

Kind Regards

dbran

Hi dbran, thanks for the reply, it is a piece of agricultural machinery so yes it is movable, only question I would have re the margin scheme is that I am not a "dealer" in agricultural machinery ( I have a small agricultural contracting business), just happen to be selling something I previously purchased, would this make any difference in qualifying to avail of the margin scheme?

Thanks again

dbran

Hi

If you are not a dealer then this may not apply to you.

Regards

dbran

clarkey1980

There is no VAT chargeable on the sale of this machinery as you were not entitled to an input credit when it was purchased pre-registration

Mr. Incognito

Vat is only chargeable if it is in the course of a trade or business.

If you purchased it as a private individual and are selling it in this capacity then VAT will not apply

Alan Shore

If the OP was in business but not registered for VAT as they chose not to register, then Is the machine always outside the VAT net? Any Revenue reference available?

clarkey1980

Alan Shore wrote: »

If the OP was in business but not registered for VAT as they chose not to register, then Is the machine always outside the VAT net? Any Revenue reference available?

From Revenue regarding commercial vehicles. Same is true for machinery

http://www.revenue.ie/en/tax/vat/leaflets/vat-and-vrt-on-motor-vehicles.html

If the trader was entitled to recover VAT on the acquisition of the vehicle (see Recovery of Tax on the Purchase of Motor Vehicles ) then the subsequent resale of the vehicle is liable to VAT on the full amount received for the vehicle. If the trader was not entitled to recover VAT on the acquisition of the vehicle, then the subsequent sale of the vehicle is not liable to VAT. This applies generally to non-deductible vehicles, such as passenger motorcars. However, it also applies where a VAT-registered trader is re-selling a commercial vehicle that he or she purchased at a time prior to registration for VAT (e.g. the trader was below the turnover threshold for registration at the time of purchase). In this case, the trader may be required to show that he or she did not recover VAT on the original purchase.

dbran

Hi

The link you posted and the extract you have given appears to relate specifically to motor vehicles only and not to machinery in general.

Regards

dbran