VAT question

yankinlk

Right, this is a simple question. I was offered goods from a company that is going out of business. They are selling everything that isn't nailed down. I was given a price for 10 pc's with monitors keyboards and mouse that are used, second hand.

I agreed on the price they suggested and offered to pay cash for them. This was fine.

An hour later i get a phone call back that there would be 21% VAT charged on all items. She spoke with the accountant and he deemed it so.

Am i getting screwed here? are they just looking for whatever they can get by any means necessary? i thought second hand goods did not require VAT? i mean i assume they paid the VAT when they bought them NEW from DELL. Now a few years later they are selling them off and charging VAT? is this correct?

Just wondering, happy to pay it if it's all above board.

thegills

I don't think they can charge VAT on second-hand goods. They will have paid VAT when bought new and would have reclaimed the VAT. If they are going out of business that they will probably not be declaring VAT they want to charge you and are probably trying to pull a fast one. If they insist than check with the revenue to see if you can reclaim it back, you'll need a full VAT receipt though. Are they selling anything else?? PM me please!

Victor

I think once you get a VAT receipt you are OK as a business.

However, I do think they are trying to pull a fast one by upping the price by 21%. Quite separately if they are going out of business, one does wonder about their bona fides as to whether they are passing the VAt on to the revenue.

Samson

I would agree with the previous two replies.
I don't think VAT applies to used goods, therefore I would not feel comfortable paying it.
The best thing to do is tell them that you are only interested in the goods at the cash price you were initially quoted.
If they are desperate enough to sell they should absorb the VAT (if it does have to be paid).

As was said they are probably chancing their arm to make an extra 21% profit.

I must check with www.revenue.ie to see if any information is listed which may clarify matters.

Samson

Try this:

http://www.revenue.ie/pdf/vatguide.pdf

Have not time at the moment to read it myself, so I'm not sure if it covers what you need.
You could always try contacting them, they are quite helpful.
Ring them, 1890 202033.
Do not use the query form on their website, they took about six weeks to reply the last time I used it!

Nobody

They are not allowed to charge VAT on second hand goods. See the revenue guides at "revenue.ie".

I'd recommend phoning (first), then penning a letter to this company outlining that you have must confirm this "VAT issue" with the revenue commissioners. I'm also very sure you'll get a quick response.

PS. Revenue aren't "Ogres". There actually bl"u"dy helpful.

yankinlk

I tried looking it up in the publication myself, but couldn't find a definite answer, so i rang them.

The answer I got was yes, i do have to pay it, or more simply, they should charge me VAT. No explanation of why, just an answer. That's good enough for me I suppose.

I guess it kind of makes sense, if the company is going out of business and they want to sell off equipment, then in order to put the money recvd back through "the books" to pay suppliers etc. they will have to do VAT invoices.

For those that wanted to see the "list" of items that they are selling off. I will post/ email it to you after I get the stuff I want. Can't have you outbidding me now can I?

hmmm...
If you are vat registered yourself you can claim the vat they charge you back thereby getting the stuff for the cash price.

My own accountant told me that If I had claimed the vat back on something, then I do not have to charge vat to the person I sell it on to , but only if the buyer is not Vat registered.

Thats the policy, I've been operating and I've been audited ( by the Revenue )with no problems.
Confused I am now:D
mm