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Getting value on buying machaery without a vat number

  • 22-01-2015 11:16PM
    #1
    yellow50HX
    Registered Users, Registered Users 2 Posts: 1,828 ✭✭✭


    Was down doing a bit of tyre kicking in millstreet and looking at what tractor I'll be looking to but in 20 years and was chatting to a friend of mine in a similar boat as we looked at the 0% finance deals that claas are giving out.

    My main work horses on the farm and both 30 years old a ford 7610 2wd and a massey hx digger. Both are working well but have done a lot of work and if any serious problems happens to them then I'm screwed. Thier book value wouldn't be huge (export value really) but the cost of replacing them would be high enough.

    Anyway at some stage I'll have to bite the bullet and put them into semi retirement. I don't plan on trading or selling them as the tractor will still be good for yard work and as a second tractor for some of the jobs I'd have and there will always be a job for the digger even if it's not used everyday anymore. So newer 4wd tractor and loader will need to be got at some stage.

    I know what I want to get NH TS/TL100 would be what I'd be planning as it ll be doing pretty much everything the tractor and digger do now other then cleaning the yard, spraying of digging holes.

    Looking at the cost for say a 2001-04 one in good condition and power shuttle I'd be looking around 25k +VAT. And that the crux as like a lot of smaller farmers I can't claim back my vat, coughing up close to 30k for something that is worth closer to 20 seems a bit mad to me.

    Going for an older tractor then would be something of a false economy as pre 2000 it's hard to find tractors with shuttles for loader work and galv coated cabs that aren't rusted bearing in mind the ford was 12 years old when we bought it and the digger was 15 any tractor I buy will most likely be here for 10-15 years or more so getting something that is already 20 and with high hours might not be ideal either.

    Buying a new one out of the box is not really an option.

    What are the options for leasing second hand machines? Could I buy something on HP for less then the price + vat. Not sure on the tax set up but can I claw some of it back over time. If the cost of a HP/lease was much cheaper the full whack and VAT it certainly something I would look at.


Comments

  • #2
    Farmer Pudsey
    Registered Users, Registered Users 2 Posts: 6,326 ✭✭✭Farmer Pudsey


    By the way you are posting are you thinking of vat registering. On a 25K+vat tractor the vat is 5750. However unless the last owner was VAT registered you will not get VAT back I think. So a tractor with VAT attached will sell a couple of K dearer than a non vat tractor. This would be especially true of 100ish HP tractors.

    Leasing may be an option but technically you have to value it on the books at end of lease period. You may also have to pay a slightly higher interest rate. As well if you miss a payment they can take back the tractor.

    IMO if holding the tractor a long time I go the normal way and use capital allowances over 8 years. You have to remember that you get CA allowances on vat as well so at high rate it is costing half that. A 30K tractor would have CA of nearly 4k/year.


  • #3
    yellow50HX
    Registered Users, Registered Users 2 Posts: 1,828 ✭✭✭yellow50HX


    Farmer Pudsey wrote: »
    By the way you are posting are you thinking of vat registering. On a 25K+vat tractor the vat is 5750. However unless the last owner was VAT registered you will not get VAT back I think. So a tractor with VAT attached will sell a couple of K dearer than a non vat tractor. This would be especially true of 100ish HP tractors.

    Leasing may be an option but technically you have to value it on the books at end of lease period. You may also have to pay a slightly higher interest rate. As well if you miss a payment they can take back the tractor.

    IMO if holding the tractor a long time I go the normal way and use capital allowances over 8 years. You have to remember that you get CA allowances on vat as well so at high rate it is costing half that. A 30K tractor would have CA of nearly 4k/year.

    If buying from a dealer then claiming the vat should be easier?


  • #4
    Farmer Pudsey
    Registered Users, Registered Users 2 Posts: 6,326 ✭✭✭Farmer Pudsey


    yellow50HX wrote: »
    If buying from a dealer then claiming the vat should be easier?

    No the tractor has to have vat claimed back on when first sold as new. This was bought in a few years ago. If a tractor is sold as new to a non registered farmer vat can never again be claimed again. If it was sold to a VAT reg farmer then when traded in again he charges vat to dealer and dealer can charge vat to a vat registered farmer and it can be reclaimed.

    Because of this Tractors that have a VAT element are worth more.


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