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Buying a van (trade only sellers)

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Poseidon
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PostPosted: 16:59 - 03 May 2021    Post subject: Buying a van (trade only sellers) Reply with quote

Howdy all,

A bit of guidance if you will. I’m in need of a van and there’s several I like the look of. Slight issue is the dealerships selling them explicitly state that they only engage in trade to trade sales, not to private individuals.

Aside from the usual sold as seen malarkey, I’m assuming this is to avoid having to add vat etc onto the sale (if indeed they’re subject to vat). What I would like to know is, how do I as a private individual get my hands on one of these trade only vehicles? Is it simply a case of rocking up in some grubby overalls and saying “mate” a lot, or do I need proof... And if I need proof, how rigorously will this be checked? If I got 50 business cards for a make believe firm knocked up, would that suffice? (As it happens all my overalls are emblazoned with the company name of a now defunct Irish engineering outfit.)

Maybe if I stick a pencil behind my ear too... Thinking
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Freddyfruitba...
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PostPosted: 17:30 - 03 May 2021    Post subject: Re: Buying a van (trade only sellers) Reply with quote

Poseidon wrote:
I’m assuming this is to avoid having to add vat etc onto the sale (if indeed they’re subject to vat).

I can't see how it can be related to VAT since as you say, not all tradesmen charge VAT. However, if it IS to with VAT, then you'd need to be able to provide a valid VAT number for the seller to avoid the issue.

Why not just phone a seller up at random to ask about a van, and without giving your details, drop in that you're a self-employed handyman or something and see what they volunteer about what paperwork you might need to show them, or whether that actually care at all?
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Poseidon
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PostPosted: 17:39 - 03 May 2021    Post subject: Re: Buying a van (trade only sellers) Reply with quote

Freddyfruitbat wrote:
.Why not just phone a seller up at random to ask about a van, and without giving your details, drop in that you're a self-employed handyman or something and see what they volunteer about what paperwork you might need to show them, or whether that actually care at all?


Yeah, I think I’ll have to. Bloody bank holidays though, will have to wait to tomorrow.
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MCN
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PostPosted: 18:40 - 03 May 2021    Post subject: Reply with quote

Anyone selling shit is usually constrained by the rules that they have to sell something.

I would ignore the 'trade only' bit and ring them up.

They can only say, 'feck off, can you not read?'.

The trade only may be to deter The Trotter types.
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Poseidon
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PostPosted: 18:45 - 03 May 2021    Post subject: Reply with quote

MCN wrote:
Anyone selling shit is usually constrained by the rules that they have to sell something.

I would ignore the 'trade only' bit and ring them up.

They can only say, 'feck off, can you not read?'.

The trade only may be to deter The Trotter types.


Maybe... Given the number of people wanting vans for private use (myself included) I should imagine it’ll put off quite a few numpties who expect a van to be held to the same standard as cars in terms of bodywork and interior... which at the end of the day, it’s a tool for a job, not a luxury item.
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Islander
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PostPosted: 18:48 - 03 May 2021    Post subject: Reply with quote

Poseidon wrote:

Maybe... Given the number of people wanting vans for private use (myself included) I should imagine it’ll put off quite a few numpties who expect a van to be held to the same standard as cars in terms of bodywork and interior... which at the end of the day, it’s a tool for a job, not a luxury item.


It's more likely to be that they have to charge VAT on the sale price for vans whether they're for commercial use or not.
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Nobby the Bastard
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PostPosted: 18:56 - 03 May 2021    Post subject: Reply with quote

They have to charge vat if vat registered. Whether you reclaim it after selling it on is neither here nor there.
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Poseidon
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PostPosted: 19:03 - 03 May 2021    Post subject: Reply with quote

All the ads I’ve seen for trade only sales explicitly state “no vat” hence wondering if that’s a trade to trade specific thing, and that they’d have to charge private buyers vat...
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Ste
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PostPosted: 19:13 - 03 May 2021    Post subject: Reply with quote

Sounds like discrimination to me. Razz

Any meaning is down to how the seller chooses to define "trade".

You might be setting up business as a sole trader doing gardening or you might even be in the trade of selling wipers for visors. There's nothing to show that you're a trader because you haven't got going yet and that's why you need to buy a van.
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t121anf
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PostPosted: 19:29 - 03 May 2021    Post subject: Reply with quote

Is this not one of the sold as is, no warranty as you know what you are getting into type of situations?
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Nobby the Bastard
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PostPosted: 19:31 - 03 May 2021    Post subject: Reply with quote

Poseidon wrote:
All the ads I’ve seen for trade only sales explicitly state “no vat” hence wondering if that’s a trade to trade specific thing, and that they’d have to charge private buyers vat...


The cost for commercial vehicles should be cost + vat. Its down to the traders to reclaim the vat they pay.

https://www.gov.uk/reclaim-vat/cars#:~:text=Commercial%20vehicles,motorhomes%20and%20motor%20caravans
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Islander
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PostPosted: 19:42 - 03 May 2021    Post subject: Reply with quote

Nobby the Bastard wrote:
They have to charge vat if vat registered. Whether you reclaim it after selling it on is neither here nor there.


Yep. It makes a huge difference in price to a non-commercial driver that wants a van - they probably don't want the hassle of explaining and arguing the toss.
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Nobby the Bastard
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PostPosted: 19:53 - 03 May 2021    Post subject: Reply with quote

Yep,to a degree. Commercial vehicles are advertised as ex vat and most private buyers won't get that they have to pay an extra.20.% on top.
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Poseidon
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PostPosted: 06:37 - 04 May 2021    Post subject: Reply with quote

Hmmm... maybe Ste is on to something. Maybe it’s not traders in general they are selling to, maybe it’s other motor traders when they say trade sales only.

They are open today, so I’ll give them a call. At least I now know it’s not something obvious I’m missing.
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Poseidon
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PostPosted: 07:31 - 04 May 2021    Post subject: Reply with quote

Nobby the Bastard wrote:
Yep,to a degree. Commercial vehicles are advertised as ex vat and most private buyers won't get that they have to pay an extra.20.% on top.


These specifically state “no vat” rather than “exc vat”. The difference is subtle but important. Presumably the vat has been paid by a previous owner... maybe it was privately owned before Thinking
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Polarbear
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PostPosted: 11:25 - 04 May 2021    Post subject: Reply with quote

How do they know a second hand vehicle is vat exempt or vat paid or whatever anyway?
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Nobby the Bastard
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PostPosted: 11:41 - 04 May 2021    Post subject: Reply with quote

VAT would be payable on every change of owner, even if it is another dealer. Sounds dodgy to me.
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Ste
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PostPosted: 12:06 - 04 May 2021    Post subject: Reply with quote

When a dealer sells a second hand vehicle, they pay VAT on their profits. It makes no difference if the buyer is a private individual or if it's someone with a trade. If the buyer is VAT registered then the buyer can reclaim the VAT but that's got nothing to do with the dealer who they buy from or the VAT the dealer has to pay.

The tax arrangements of the dealer has got nothing to do with anyone who buys a second hand vehicle from them.

I say phone them up and ask to buy the vehicle. Laughing
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Poseidon
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PostPosted: 12:14 - 04 May 2021    Post subject: Reply with quote

Polarbear wrote:
How do they know a second hand vehicle is vat exempt or vat paid or whatever anyway?


No idea... never bought a van before.

I’m not arsed either way. If it has vat on top, I’ll just budget that in.
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Ste
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PostPosted: 13:46 - 04 May 2021    Post subject: Reply with quote

Business to business transactions aren't covered by the Consumer Rights Act so I think them saying "trade only" is to do with the terms of the sale in that the seller doesn't want the responsibilities that come with selling to private individuals.
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Polarbear
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PostPosted: 13:53 - 04 May 2021    Post subject: Reply with quote

Ste wrote:
When a dealer sells a second hand vehicle, they pay VAT on their profits. It makes no difference if the buyer is a private individual or if it's someone with a trade. If the buyer is VAT registered then the buyer can reclaim the VAT but that's got nothing to do with the dealer who they buy from or the VAT the dealer has to pay.

The tax arrangements of the dealer has got nothing to do with anyone who buys a second hand vehicle from them.

I say phone them up and ask to buy the vehicle. Laughing


I know how it works for new stuff as in trade to retail, seller sells, charges vat then claims back the VAT he paid. Next in chain does the same with final retailer charging customer VAT which is then paid to Mr. VAT man.

All I can presume with these vans is they have never been sold privately to a non VAT registered owner.

I'd still like to know how it works here because with goods you always pay VAT and claim it back, albeit by offsetting your purchase VAT against your sales VAT and only actually paying the difference so the van seller, from what I can see has to charge VAT and claim it back.

Can someone confirm or am I totally barking up the wrong tree?
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Nobby the Bastard
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PostPosted: 13:58 - 04 May 2021    Post subject: Reply with quote

Polarbear wrote:


I know how it works for new stuff as in trade to retail, seller sells, charges vat then claims back the VAT he paid. Next in chain does the same with final retailer charging customer VAT which is then paid to Mr. VAT man.

All I can presume with these vans is they have never been sold privately to a non VAT registered owner.

I'd still like to know how it works here because with goods you always pay VAT and claim it back, albeit by offsetting your purchase VAT against your sales VAT and only actually paying the difference so the van seller, from what I can see has to charge VAT and claim it back.

Can someone confirm or am I totally barking up the wrong tree?
It's got nothing to the purchaser, they have to pay the VAT regardless of trade, private or VAT registered.

The person selling the vehicle pays the VAT received less any amount in VAT that they paid on it to HMRC.
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Ste
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PostPosted: 14:09 - 04 May 2021    Post subject: Reply with quote

The VAT thing is a red herring, who the vehicle is sold to doesn't change whether or not the seller is liable to pay VAT to the tax man.
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doggone
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PostPosted: 14:53 - 04 May 2021    Post subject: Reply with quote

Ste wrote:
When a dealer sells a second hand vehicle, they pay VAT on their profits. It makes no difference if the buyer is a private individual or if it's someone with a trade. If the buyer is VAT registered then the buyer can reclaim the VAT but that's got nothing to do with the dealer who they buy from or the VAT the dealer has to pay.

The tax arrangements of the dealer has got nothing to do with anyone who buys a second hand vehicle from them.

I say phone them up and ask to buy the vehicle. Laughing

Not sure about that bit. Laughing
When VAT registered if you sell a vehicle or machinery through a dealer you have to charge them VAT but they can reclaim that later.
When you buy as a VAT registered business you can reclaim the VAT as a rule.
It doesn't make much sense but if you aren't VAT registered they will still have to charge the 20% tax but you won't be able to reclaim it.
When you sell you won't be obliged to add it on as you didn't reclaim it either.
Then private sellers just don't bother with it either way.
Confused yet? You should be.
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Ste
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PostPosted: 15:04 - 04 May 2021    Post subject: Reply with quote

doggone wrote:
Ste wrote:
When a dealer sells a second hand vehicle, they pay VAT on their profits.

Not sure about that bit. Laughing

What do they pay VAT on then?

edit:

"If you sell second-hand vehicles on which you were not charged VAT, using the Margin Scheme will save you money.

Without the Margin Scheme, you would have to account for VAT on the full selling price of each vehicle.

But, if you use the Margin Scheme, you can account for VAT on the difference between the price you pay for a second-hand vehicle and the price you sell it for.

If you sell a vehicle for less than you paid for it, you will not have to account for any VAT on the sale."

https://www.gov.uk/guidance/the-margin-scheme-on-second-hand-cars-and-other-vehicles-vat-notice-7181#section2
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