VAT / VRT

jrby

I'm thinking about buying a second hand car, more the 6 months old and more than 6,00km. And I'm trying to understand the VAT / VRT considerations.

I'm a sole trader with a vat number in Ireland.

Do I need to pay VAT at point of sale?
Do I need to pay VAT on bringing it in to Ireland?
I assume VRT is calculated based on criteria separate to the cost of the car in the U.K.?
Are there any restrictions / implications on me selling the car immediately to my brother?

Calahonda52

You subject line does not say the car is being imported but I am assuming its is what you have in mind.

http://www.revenue.ie/en/online/vrt-calculator.html
deals with the math.
If you are thinking that you can bury the VAT paid on the car in you sole trader accounts forget about it.

jrby

Thanks, I'm just not clear if when buying the car in U.K., and assuming I use my vat number, I'm getting the car vat free. Then in Ireland, I'm not clear what I have to do re vat, self assess or ignore it?

Calahonda52

jrby wrote: »

Thanks, I'm just not clear if when buying the car in U.K., and assuming I use my vat number, I'm getting the car vat free. Then in Ireland, I'm not clear what I have to do re vat, self assess or ignore it?

When you go to pay the VRT at the NCTS centre, they will charge you VAT there:
from the site I posted earlier
http://www.revenue.ie/en/tax/vrt/faqs-vrt.html#question23

I bought a car in the UK and paid VAT there. Now I am asked to pay VAT in Ireland. Why?
VAT is payable in the State on registration where a vehicle is less than 6 months old or has less than 6,000 kilometres on the clock at the time of registration. However, in these circumstances, any VAT paid in the UK may be refunded on application to the appropriate UK VAT authority.

VAT on vehicles is a different animal than VAT on normal goods and services because it is so open to abuse.

If you think you can import the car, pay the VAT at the NCTS place, and then sell the car to the bro
but reclaim the VAT paid on the car against VAT paid on your other inputs, you are missing two key points.
1: the car must be used in the business.
2: a car is not a commercial vehicle

If you do this, [when they twig it because the VAT payment at the NCTS place is flagged in their system as a special], they will subject you to a full audit which is never pretty

jrby

thanks, that makes sense