VAT on commercial vehicle

harderthanf

Would anyone know how VAT on a commercial vehicle works. Suppose:

Person A buys a brand new van, from a dealer, at a cost of €20,000 + VAT. This person also has a VAT number (self employed or limited company). 3 years later, person A sells that van to person B, as a private sale. Is person B liable to pay any VAT? I would guess that VAT is taken care of on the initial sale and person A can offset that with their returns and person B has no liability?

What happens if person C gets involved and person C is a dealer. They take in the van, from person A, and sell it on. As a company, don't they have to charge person B on that sale?

This is all very confusing!

Lenar3556

No, VAT will arise again on the sale.

Person/Entity A, being VAT registered, will be in a position to reclaim the VAT element when they purchase the vehicle assuming it is for use by the business concerned.

When they sell it in three years time, they will then need to charge VAT on the sale price and return this to revenue.

So for example;

Purchase for €24,600 - Reclaim €4,600 VAT element.

Sell for €15,000 in three years time. €2,800 of that is VAT which would need to be returned to revenue.