Vat on commercial veichles

ciandelaney02

I am looking at buying a commercial veichle for my business but I am wondering if I am claiming vat back on the total purchase price of the veichle including vrt i.e ( price + vat + vrt) e.g €35000 + €8050 + €6950 = €50000 - 23% vat = €40650 + vat = claiming back €9350
Or am I only claiming back the €8050 before vrt was added.
Thanks

Mad_maxx

ciandelaney02 wrote: »

I am looking at buying a commercial veichle for my business but I am wondering if I am claiming vat back on the total purchase price of the veichle including vrt i.e ( price + vat + vrt) e.g €35000 + €8050 + €6950 = €50000 - 23% vat = €40650 + vat
Or am I only claiming back the €8050 before vrt was added.
Thanks

Vat is chargeable in the UK so the VRT figure is irrelevant

ciandelaney02

I’m looking at buying a new veichle from an Irish dealer

Synode

There's no VAT on VRT. That gets added at the end. So just the €8,050 amount

Mad_maxx

ciandelaney02 wrote: »

I’m looking at buying a new veichle from an Irish dealer

So why mention vrt at all, surely the VRT was just silently baked into purchase price? , vat would in this case be reclaimable on the grand total inclusive of vrt

Synode

Mad_maxx wrote: »

So why mention vrt at all, surely the VRT was just silently baked into price, vat would in this case be reclaimable on the grand total inclusive of vrt

Because there's VRT on all new vehicles. And it's a separate item that does not accrue VAT

Mad_maxx

Synode wrote: »

Because there's VRT on all new vehicles. And it's a separate item that does not accrue VAT

I'm not registered for vat so wouldn't be able to reclaim the 23%, just assumed you reclaimed 23% of the total

Learn something new every day

Shane O' Malley

You will be charged Vat on the full price including VRT for a registered vehicle IE A vehicle with a registration plate.. The VRT is paid by the dealer when the vehicle is registered and the dealer then charges you VAT at 23% on the agreed price.

However if you buy a unregistered vehicle from a dealer then you will only be charged Vat on the price the dealer charges and then you will be responsible for registering the vehicle and paying the VRT.

Details at section 4.2 at https://www.revenue.ie/en/tax-professionals/tdm/value-added-tax/part03-taxable-transactions-goods-ica-services/Goods/goods-transactions-motor-vehicles.pdf

Synode

Why would a dealer register a vehicle before selling it?

And they normally sort the registration for you, you just have to fill in forms.

ciandelaney02

Synode wrote: »

Why would a dealer register a vehicle before selling it?

And they normally sort the registration for you, you just have to fill in forms.

A lot of dealers registered the 5 seat commercial stock they didn’t sell before the vrt changes last August before they went up in price

Synode

ciandelaney02 wrote: »

A lot of dealers registered the 5 seat commercial stock they didn’t sell before the vrt changes last August before they went up in price

That was an unusual, one off type of situation. A dealer wouldn't normally register a car before sale

ciandelaney02

So when a dealer advertises a new commercial veichle for €52154 plus vat = €64150 inc vat that price is including vrt.
Does that not mean you’re reclaiming vat on the total purchase price ?
And if not how is that price structured?

Synode

ciandelaney02 wrote: »

So when a dealer advertises a new commercial veichle for €52154 plus vat = €64150 inc vat that price is including vrt.
Does that not mean you’re reclaiming vat on the total purchase price ?
And if not how is that price structured?

I've never seen an ad like that. As has been said above, you only pay VRT when you buy a car that hasn't been registered previously (which from my experience is the vast majority of cases). And there's no VAT on the VRT amount

ciandelaney02

If you look up brand new Land Rover discovery’s Land Rover dealerships advertise the cars as a certain price plus vat even though they’re unregistered. I fully understand what you’re saying it’s just that the numbers don’t add up.

Synode

ciandelaney02 wrote: »

If you look up brand new Land Rover discovery’s Land Rover dealerships advertise the cars as a certain price plus vat even though they’re unregistered. I fully understand what you’re saying it’s just that the numbers don’t add up.

Can you throw up a link?

Shane O' Malley

Synode wrote: »

Can you throw up a link?

Is it that they get registered when they are imported. Not the same as registered to a user but to a dealer who is then responsible for paying the Vrt when it is sold to final user.

ciandelaney02

It won’t let me post a link. They’re on Carzone

Synode

Shane O' Malley wrote: »

Is it that they get registered when they are imported. Not the same as registered to a user but to a dealer who is then responsible for paying the Vrt when it is sold to final user.

Never heard of such a situation. As far as I know the VRT has to be paid upon registration, there's no deferring it.

There's a possibility the seller will pay the VRT themselves on the sale. And are simply giving an increased price to the buyer by not showing the non vatable VRT separately

Synode

At the end of the day, you can only claim the VAT amount that's noted on a purchase invoice. So if they haven't noted the VRT on it and have charged everything at 23%, that's what you claim and they pay

Shane O' Malley

Found a link that seems to solve it.

Firstly, the dealer advertises a price as x plus vat which will include the Vrt. The dealer does not charge vat on the vrt but collects the vrt on behalf of the government. That means that the price you pay will not be the advertised price plus 23% vat. Ie vat on the vrt explosive figure.

Link below brings you to the summary of a revenue document.

https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.revenue.ie/en/tax-professionals/tdm/value-added-tax/part03-taxable-transactions-goods-ica-services/Goods/goods-transactions-motor-vehicles.pdf&ved=2ahUKEwj3lIel0vDfAhXYTxUIHYRfCh0QFjABegQICxAE&usg=AOvVaw0Jrd6yMBSVH6OZxT2eunRr

Synode

Shane O' Malley wrote: »

Found a link that seems to solve it.

Firstly, the dealer advertises a price as x plus vat which will include the Vrt. The dealer does not charge vat on the vrt but collects the vrt on behalf of the government. That means that the price you pay will not be the advertised price plus 23% vat. Ie vat on the vrt explosive figure.

Link below brings you to the summary of a revenue document.

https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.revenue.ie/en/tax-professionals/tdm/value-added-tax/part03-taxable-transactions-goods-ica-services/Goods/goods-transactions-motor-vehicles.pdf&ved=2ahUKEwj3lIel0vDfAhXYTxUIHYRfCh0QFjABegQICxAE&usg=AOvVaw0Jrd6yMBSVH6OZxT2eunRr

What section of that doc states it?

Seems silly them advertising a different price than what you actually pay

Shane O' Malley

Synode wrote: »

What section of that doc states it?

Seems silly them advertising a different price than what you actually pay

Section 4.2.

But they are not advertising a different price. You are just assuming the rate of vat. If you are vat registered it is just a cashflow consideration.

If they quote including vat and you are vat registered than you need to find the value of the vat to work out the final cost to you.

If the Vehicle has been pre registered then the vat will be calculated on the vrt inclusive value.

Synode

Sorry I misread you're previous post. So they're just saying €xxxxx + VAT. That's perfectly fine and agrees with what I've been saying. To calculate the actual VAT you need the price exclusive of VRT

Synode

ciandelaney02 wrote: »

If you look up brand new Land Rover discovery’s Land Rover dealerships advertise the cars as a certain price plus vat even though they’re unregistered. I fully understand what you’re saying it’s just that the numbers don’t add up.

Coming back to this post, what makes you think the figures don't add up.

colm_mcm

Shane O' Malley wrote: »

You will be charged Vat on the full price including VRT for a registered vehicle IE A vehicle with a registration plate.. The VRT is paid by the dealer when the vehicle is registered and the dealer then charges you VAT at 23% on the agreed price.

However if you buy a unregistered vehicle from a dealer then you will only be charged Vat on the price the dealer charges and then you will be responsible for registering the vehicle and paying the VRT.

Details at section 4.2 at https://www.revenue.ie/en/tax-professionals/tdm/value-added-tax/part03-taxable-transactions-goods-ica-services/Goods/goods-transactions-motor-vehicles.pdf

That is incorrect. You don’t pay VAT on the VRT bit, so for example, if a van is €20,000 including VAT, and VRT is €200 then you’re claiming VAT on €19,800.
Not a problem when it’s a small VRT amount, but for the likes of crewcabs, VRT is a bigger chunk of the value of the vehicle. Same principle applies.

Shane O' Malley

Synode wrote: »

Sorry I misread you're previous post. So they're just saying €xxxxx + VAT. That's perfectly fine and agrees with what I've been saying. To calculate the actual VAT you need the price exclusive of VRT

Yeh, seems like that. Only complication I can see is if the vehicle has been pre registered. If you are buying off a standard price list and ordering it in then that would not be the case.

Synode

Shane O' Malley wrote: »

Yeh, seems like that. Only complication I can see is if the vehicle has been pre registered. If you are buying off a standard price list and ordering it in then that would not be the case.

There's no complication if it's a registered vehicle. You pay VAT at 23% on full amount as someone would have already paid the VRT

colm_mcm

Those Discovery’s are 2 seat commercial so VRT is €200. What’s probably confusing is they lead with the price of the S model, but show the SE and HSE models.

Synode

colm_mcm wrote: »

That is incorrect. You don’t pay VAT on the VRT bit, so for example, if a van is €20,000 including VAT, and VRT is €200 then you’re claiming VAT on €19,800.
Not a problem when it’s a small VRT amount, but for the likes of crewcabs, VRT is a bigger chunk of the value of the vehicle. Same principle applies.

They were right in saying the full transaction is at 23% when buying a car that is already registered. This is because the VRT has already been paid on it

colm_mcm

Synode wrote: »

There's no complication if it's pre registered. You pay VAT at 23% as someone would have already paid the VRT

I sold a hilux demo to a fella back in 04 and the buyer was able to claim VAT on the full amount, where we would have paid around 3-4K VRT and less VAT.

colm_mcm

Synode wrote: »

They were right in saying the full transaction is at 23% when buying a car that is already registered. This is because the VRT has already been paid on it

I misunderstood the terminology of buying a vehicle with/without plates on it.

Synode

colm_mcm wrote: »

I sold a hilux demo to a fella back in 04 and the buyer was able to claim VAT on the full amount, where we would have paid around 3-4K VRT and less VAT.

Yep, the VRT is baked into cost once paid.

ciandelaney02

Thanks for the help lads, that’s really cleared things up.