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Insurance payout without VAT?

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  • 11-01-2017 2:48pm
    #1
    sebna
    Registered Users Posts: 55 ✭✭


    Hi,

    I was in the accident. Small thing. I have received quotation from the garage submitted to insurer. The quotation was negotiated down by the insurer with the garage and that is ok.

    When it comes to payout I do not want to do it cashless but I would like to receive the money so I can deal with it the way I see fit but the insurer is saying that they will pay me cash but without VAT so -21% of the quotation.

    Is that right? I have to pay VAT on all repairs which I will get done so why they would not pay the quoted price with the VAT?

    Thanks for any clarification.


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    #2
    ArthurG
    Registered Users Posts: 1,306 ✭✭✭ArthurG


    My guess would be that the garage would provide them with a VAT invoice for repairs that they can then claim back. If they pay it direct to you that opportunity is lost.


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    #3
    sebna
    Registered Users Posts: 55 ✭✭sebna


    Hi Arthur,

    Thanks for replying.

    Maybe but in the end they have to provide me with the means to cover the costs and I have to pay VAT so this should be covered as well as quoted? Is it even legal what they are trying to do?

    Anybody who recently took cash and got it with or without VAT?

    Thanks


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    #4
    vandriver
    Registered Users Posts: 3,460 ✭✭✭vandriver


    Insurance companies are not able to reclaim VAT.
    Is this a company car?


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    #5
    Stheno
    Moderators, Business & Finance Moderators, Science, Health & Environment Moderators, Social & Fun Moderators, Society & Culture Moderators Posts: 51,687 Mod ✭✭✭✭Stheno


    vandriver wrote: »
    Insurance companies are not able to reclaim VAT.
    Is this a company car?

    Yes they are they can set VAT they have paid off VAT they recieve.


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    #6
    vandriver
    Registered Users Posts: 3,460 ✭✭✭vandriver


    As Vat exempt companies?


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    #7
    vandriver
    Registered Users Posts: 3,460 ✭✭✭vandriver


    My guess would be that a lot of cash claimants either get the repair done for half nothing in a cash deal,or don't get the work done at all.
    The insurance company is just applying a 20% discount knowing that the VAT b/s will satisfy most people who just want to get their hands on cash.


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    #8
    sebna
    Registered Users Posts: 55 ✭✭sebna


    vandriver wrote: »
    Insurance companies are not able to reclaim VAT.
    Is this a company car?

    It is privately owned car.


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    #9
    Stheno
    Moderators, Business & Finance Moderators, Science, Health & Environment Moderators, Social & Fun Moderators, Society & Culture Moderators Posts: 51,687 Mod ✭✭✭✭Stheno


    vandriver wrote: »
    As Vat exempt companies?

    The exemption is only for insurance products, e.g. Axa are registered for VAT in Ireland they pay/charge VAT on non-insurance products/services that they purchase on sell


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    #10
    ants09
    Registered Users Posts: 709 ✭✭✭ants09


    Stheno wrote: »
    The exemption is only for insurance products, e.g. Axa are registered for VAT in Ireland they pay/charge VAT on non-insurance products/services that they purchase on sell

    Maybe so that they are vat registered for other product's/services

    But they are vat exempt in relation to insurance and insurance services (which includes payouts on insurance claims), and as such they can't reclaim the vat back on insurance payout's.


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    #11
    Stheno
    Moderators, Business & Finance Moderators, Science, Health & Environment Moderators, Social & Fun Moderators, Society & Culture Moderators Posts: 51,687 Mod ✭✭✭✭Stheno


    ants09 wrote: »
    Maybe so that they are vat registered for other product's/services

    But they are vat exempt in relation to insurance and insurance services (which includes payouts on insurance claims), and as such they can't reclaim the vat back on insurance payout's.

    Yes I was correcting the post that said they were vat exempt companies not vat exempt for insurance products and related items.

    In the case of the OP given that axa would not pay VAT to the garage, but the OP would Axa want to reimburse the amount they would be liable for.


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    #12
    Seve OB
    Registered Users Posts: 15,835 ✭✭✭✭Seve OB


    OP. Insurance company will usually have somewhere they would prefer the car to be repaired, but they will allow you to get it repaired wherever you want. Why not just let them pay for it at your preferred shop and then everybody is happy?


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    #13
    traco
    Registered Users Posts: 1,594 ✭✭✭traco


    We had a company car in a fender bender and the insurance paid the bill but not the VAT so we got an invoice from the garage for the excess and the total VAT amount which we claimed back.

    This also happened on a windscreen replacement on a van, we had to pay the VAT and the insurance paid for the screen and fitting.


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    #14
    vandriver
    Registered Users Posts: 3,460 ✭✭✭vandriver


    Stheno wrote: »
    Yes I was correcting the post that said they were vat exempt companies not vat exempt for insurance products and related items.

    In the case of the OP given that axa would not pay VAT to the garage, but the OP would Axa want to reimburse the amount they would be liable for.
    You don't appear to know what Vat exempt means.


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    #15
    goochy
    Registered Users Posts: 4,249 ✭✭✭goochy


    vat is 23 %


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    #16
    Seve OB
    Registered Users Posts: 15,835 ✭✭✭✭Seve OB


    goochy wrote: »
    vat is 23 %

    not always :D


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    #17
    ohnonotgmail
    Registered Users Posts: 40,168 ✭✭✭✭ohnonotgmail


    as somebody just said the VAT rate is 23% BUT that is the rate on parts. the rate on labour is 13.5%. so what percentage have they actually deducted?


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    #18
    vandriver
    Registered Users Posts: 3,460 ✭✭✭vandriver


    ohnonotgmail wrote: »
    as somebody just said the VAT rate is 23% BUT that is the rate on parts. the rate on labour is 13.5%. so what percentage have they actually deducted?
    Apart from one poster,I think we've established that the VAT charged is immaterial to the insurance company,as they pay the full price including VAT,and can't claim back any of it.
    (Unless the claimant is vat registered of course,in which case the vat can be claimed back by the individual/company so in that case the insurance company would pay the claim ex vat )


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    #19
    ohnonotgmail
    Registered Users Posts: 40,168 ✭✭✭✭ohnonotgmail


    vandriver wrote: »
    Apart from one poster,I think we've established that the VAT charged is immaterial to the insurance company,as they pay the full price including VAT,and can't claim back any of it.


    well you stated it as a fact but have we actually established that it is true?


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