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VAT On Donedeal Adverts.

  • 25-04-2023 8:44pm
    Registered Users Posts: 27

    Why do some ads on Donedeal specify "No VAT"? Some tractors sold privately are advertised this way and theres a tractor dealer near me with ads specifying "No VAT", but also ads up with "Plus VAT".

    I'm useless at understanding tax 😭😭


  • Registered Users Posts: 747 ✭✭✭caesar

    I've got a tractor up at the moment and have the "No Vat" thing to clarify that the price you see is the price, it's especially for people scanning through and seeing mine alongside others that might be listed ex VAT prices.

    Dealers are gonna put the lower number on their ad, and then say plus VAT in the detail. Private sellers tend to do the opposite because the reality is very few farmers are VAT registered.

    I could have some of the following arseways. . .

    Ofc VAT-registered farmers might prefer to buy from a dealer (or from a VAT-registered farmer) because they can claim the VAT back. Pretty sure if a VAT-registered farmer sells their tractor to non-VAT registered farmer then VAT would need to be added.

    For the avoidance of doubt when anyone is selling a tractor privately and wasn't VAT registered when they bought it then the VAT was paid on day one. And for the next buyer, there is no way of claiming it back (as far as I know). And if for whatever reason that farmer (or their family) sells the tractor to a dealer, the dealer will add their own margin and then VAT on top when selling it back out. So in essence, the tractor would have VAT on it again. I only found this out last week. Seemed a bit odd at first.

    Im not clear on how dealers would have tractors with no VAT. Thinks it safe to assume they are well above the VAT registration threshold. Could be dealers:

    1. From the North.
    2. Selling it on behalf of a customer (not sure how that works with VAT, was curious about this it like a referral fee/commission??)
    3. VAT fiddling. . .
    4. doing something else which is not fiddling

    Think I encountered something like 2 when I picked up a mower for a patch of grass we need to keep cut. The invoice said "No Vat".

  • Registered Users Posts: 1,151 ✭✭✭weatherbyfoxer

    "No vat" generally means there is no vat docket with the tractor so vat cant be claimed this is usually the case if the owner is not vat registered

  • Registered Users Posts: 125 ✭✭fulldnod

    When a second hand tractor is no vat, the vat has been paid and not claimed back like most farmers, if a tractor is plus vat, the vat was claimed back and has to be add back to the price, most contractors are vat registered

  • Registered Users Posts: 1,776 ✭✭✭paddysdream

    No fiddle.

    If a normal unregistered farmer buys a new tractor then that tractor will never have a vat docket.Therefore its less attractive to a vat registered user ie contractor/tillage farmer etc.

    Anyone vat registered will be looking for a secondhand machine with a vat docket as this will leave the machine cheaper to them ie they can reclaim the vat.

    Think anything that says "margin scheme" has no vat docket.

    Thats my understanding of it anyways but could be out by a mile.

  • Registered Users Posts: 1,876 ✭✭✭farawaygrass

    So when ads say no vat I can’t still pay with a cheque and put it through the books?

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  • Registered Users Posts: 2,409 ✭✭✭J.O. Farmer

    No reason why a second hand tractor with no vat can't be put through the books.

    No vat means Vat was paid already by a previous owner.

    My understanding of the margin scheme is vat is charged on the margin the dealer has on a car.

    So if on paper the dealer makes 1,000 on a 10,000 car the vat is on the 1,000 not the 10,000. If there's no margin on paper there's no vat to reclaim.

  • Registered Users Posts: 1,776 ✭✭✭paddysdream

    You can pay by cheque ,finance it etc and of course put through the books.

    The only difference is that if you are vat registered you cannot reclaim the vat on that machine.If,like most Irish farmers you are not vat registered then it makes no difference if no vat docket is available with the nachine

  • Moderators, Society & Culture Moderators Posts: 2,924 Mod ✭✭✭✭K.G.

    Just for the fun of it some times you see the phrase "margin scheme ".how does that work

  • Registered Users Posts: 2,409 ✭✭✭J.O. Farmer

    The margin scheme is as below,purchase%20price%20of%20the%20goods.

    The margin scheme is used as a means of reducing the possibility of double taxation on the sale of second-hand goods. This scheme is optional.

    It operates by allowing dealers to pay Value-Added Tax (VAT) on the difference between the sale price and the purchase price of the goods.

    The margin scheme applies to:

    • certain second-hand goods
    • works of art
    • antiques and collector's items
    • second-hand vehicles and second-hand agricultural machinery acquired by dealers as stock-in-trade on, or after, 1 January 2010.

  • Moderators, Society & Culture Moderators Posts: 2,924 Mod ✭✭✭✭K.G.

    So if they trade in something for 5 k and sell it for 6 they only pay vat on 1 k.if they sell it for that they trade it in at they pay no vat.

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  • Registered Users Posts: 2,409 ✭✭✭J.O. Farmer

  • Registered Users Posts: 27 bigned

    And if the buyer of the tractor is VAT registered they can claim that VAT back right?

  • Registered Users Posts: 507 ✭✭✭1373

    If the man selling the tractor is not vat registered, then he cannot charge vat . So the price is the price with no vat to be claimed , am I correct. ?

  • Registered Users Posts: 1,151 ✭✭✭weatherbyfoxer

    If someone who's not vat registered buys a tractor they have to pay the vat .Once the vat docket is paid on the machine there will never be vat to be claimed on it again and it will be advertised with "NO VAT"

  • Registered Users Posts: 17,928 ✭✭✭✭Bass Reeves

    A final thing about Vat. Previously if a dealer/ trader bought of an unregistered farmer he could resell with vat. That is he could buy in a tractor for 10k and do a virtual tax claim of approx 1.8k and when he resold it at 12k there was vat the 12k.

    This allowed them to resell tractors from unregistered to registered. This was done away with about twenty years ago as there was some abuse of the system

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