vat question, probably for Lakill

Dunedin

Was chatting to the Claas rep at the farm machinery show about new tractors.

He said that for example cost of tractor is 50k plus vat which would be circa 60k.

If you are allowed 20k on trade in, then you only pay vat on 30k for new tractor.

Can anyone confirm.

Buford T. Justice XIX

Dunedin wrote: »

Was chatting to the Claas rep at the farm machinery show about new tractors.

He said that for example cost of tractor is 50k plus vat which would be circa 60k.

If you are allowed 20k on trade in, then you only pay vat on 30k for new tractor.

Can anyone confirm.

Only if you are vat registered I think.

If you aren't, then you pay 40k ie 60k tractor (vat included) less 20k (vat included) trade in.

Edit: look at the machinery sections in the journal classifieds and some prices state vat not included so you would have to add on vat to the price if you aren't vat registered I think.

Gard1

Buford T. Justice V wrote: »

Only if you are vat registered I think.

If you aren't, then you pay 40k ie 60k tractor (vat included) less 20k (vat included) trade in.

Edit: look at the machinery sections in the journal classifieds and some prices state vat not included so you would have to add on vat to the price if you aren't vat registered I think.

You have to pay vat on full price unless you are vat registered.

Dunedin

Gard1 wrote: »

You have to pay vat on full price unless you are vat registered.

Maybe the rep just assumed I was vat registered and/or was trying to reel me in with some selective sales pitch......

It sounded a bit too good to be true.

9935452

Buford T. Justice V wrote: »

Only if you are vat registered I think.

If you aren't, then you pay 40k ie 60k tractor (vat included) less 20k (vat included) trade in.

Edit: look at the machinery sections in the journal classifieds and some prices state vat not included so you would have to add on vat to the price if you aren't vat registered I think.

Ive heard even if you are vat registered , you might have to issue a vat invoice for the tractor you are trading as well so it could cost you a few grand more.

Crumbs868

9935452 wrote: »

Ive heard even if you are vat registered , you might have to issue a vat invoice for the tractor you are trading as well so it could cost you a few grand more.

IF VAT was claimed at purchase you need to supply a VAT invoice and account for VAT as tractor is still in the VAT net

9935452

Crumbs868 wrote: »

IF VAT was claimed at purchase you need to supply a VAT invoice and account for VAT as tractor is still in the VAT net

Exactly what im saying . Depending on how the deal is done , it could cost you 4.5 grand more

Hershall

Dunedin wrote: »

Was chatting to the Claas rep at the farm machinery show about new tractors.

He said that for example cost of tractor is 50k plus vat which would be circa 60k.

If you are allowed 20k on trade in, then you only pay vat on 30k for new tractor.

Can anyone confirm.

Also that 20k trade in let's say you gave 15k for that tractor some years ago then there's a profit of 5k that's taxable. Just something to remember.

lakill Farm

Dunedin wrote: »

Maybe the rep just assumed I was vat registered and/or was trying to reel me in with some selective sales pitch......

It sounded a bit too good to be true.

Sorry only seen this now. If the tractor is €50k and he is offering 20k for yours I would take it

you pay 50k plus vat
He pays you €20k plus vat if you can issue him a vat invoice

so if your vat registered it will cost you €30k plus vat ( Vat to be refunded) so net of €30k

if your not vat it will cost you €36,900 (30k plus vat)

lakill Farm

Hershall wrote: »

Also that 20k trade in let's say you gave 15k for that tractor some years ago then there's a profit of 5k that's taxable. Just something to remember.

that doesn't relate to the vat

But what you are explaining is called balancing charge on capital allowances and can work as a negative or positive depending on capital allowances claimed

Panch18

Lakill - if you don't mind me asking - what are most fellas doing with regards to Cap Allowances or financing of new tractors.

Like a tractor bought new and sold after say 5 years will generally have a serious balancing charge on it as tractors are holding their value so well

Are most lads leasing now or what?

lakill Farm

Panch18 wrote: »

Lakill - if you don't mind me asking - what are most fellas doing with regards to Cap Allowances or financing of new tractors.

Like a tractor bought new and sold after say 5 years will generally have a serious balancing charge on it as tractors are holding their value so well

Are most lads leasing now or what?

The agri contractors are tending to go HP route - Vat refunded straight away

Farmers not vat registered its a mix of leasing and HP.

No solution is a fixed one for all. Finance has been the difficult area up to now.

Not all tractors hold the value