This might be a silly question, but here goes.......On Volvo's used car site there are some prices with a price saying Cash Price and others saying Cash Price and underneath it say's "VAT Qualifying".
What does that mean? Is it that the ones with VAT qualifying will have an extra 20% stuck on the cash price? Out of 9 x V90's I am looking at, 6 just have the Cash Price bit and 3 have VAT qualifying.
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Something to do with VAT and purchase by a business.
Link below purports to explain but I'm not sure I follow it:
www.beckevans.co.uk/export/what-is-a-vat-qualifying-car
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I think it means that VAT was never paid on the original purchase, and if you are buying it for business and you are VAT qualifying, you wont have to pay it. If you aint, you will. Think you pay the VAT on the original purchase price too, not the second hand price.
Last edited by: Zero on Fri 6 Sep 24 at 15:49
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Vat qualifying means the car was originally sold registered by certain types of business - Car demonstrator, Car Rental Company, Leasing Company, Large Driving School
They reclaimed the vat and when they sold the car they received a VAT credit.
If the next buyer is VAT registered and in a particular industry then can pay the VAT and recover it from the VATman.
This can go on for a cycle of a few businesses BUT if a private buyer owns the car the VAT reclaim on the car stops.
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Thanks for the quick replies.
So as I understand it, if the company I work for buys the car, they won't be paying more than the Cash Price, but how the VAT get's handled will be different to if we were buying some other item like a laptop... Is that about right?
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But I am not sure if just buying it as a "company car" qualifies for reclaiming VAT.
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A "selective group of businesses" can only reclaim the VAT on buying a Brand new car or a car that was bought by originally by a qualifying business.
Selective Group of Businesses - New car demonstrator, Car Rental Company, Certain Leasing Company Contracts, Large Driving School etc etc
The VAT is paid and reclaimed = VAT FREE
Every time a car is sold VAT is applied and reclaimed by a company in the selective group
As soon as the car is sold to a company out with "the selective group" - say a shopkeeper/builder etc etc or a private consumer the "reclaim VAT ability" is lost no matter who buys it.
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Hold on, the car I bought was previously a hire car. There was no mention of VAT when I bought it, £4k less than new price at eight months and 8K miles. Is there still a VAT cloud over it?
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As a consumer you paid VAT on the car (essentially VAT on the garage buy/sell difference) the garage will have paid that VAT on the sale of your car to the Vatman
Your car is now in the same situation as if you bought the car new - VAT paid and cannot be reclaimed by anyone.
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Thanks for the feedback. Appreciated!
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VAT Qualifying question - Bromptonaut
