VAT on Buses

burgburg Experienced MentorGloucesterPosts: 1,440Moderator, FMAAT, AAT Licensed Accountant
Buses appear to be classed as commercial vehicles for VAT purposes.

The services supplied by a bus with more than 10 seats is zero rated.

Would you say the VAT chargeable on the sale/purchase of a bus should be standard rated?

If so can anyone find any legislation to back this up? I can find nothing specifically relating to buses.
Regards,

Burg

Comments

  • slackdaslackda Trusted Regular Posts: 460Registered
    Surely a bus is classifed as a commercial vehicle, same as a transit with rows to seats? (i.e a big transit that seats 15)

    ...will have a look about though


    what i found so far :

    http://www.hmrc.gov.uk/VAT/sectors/motors/what-is-car.htm

    Quote form that site : In addition, the following are not cars for VAT purposes:

    vehicles capable of accommodating only one person or suitable for carrying twelve or more people including the driver.

    but it deosn't clairfy if a bus is actually a commercial vehicle......guess this going to be a call to the VAT helpline.
  • JodieRJodieR Experienced Mentor Posts: 1,002Registered
    Yes, I've got a client who runs a transport company and we claim back the VAT on all vehicles purchased (and all the diesel & other associated costs), but as you say, the supply of services where the vehicle has more than 10 seats are zero rated (meaning that he's usually due a refund on his VAT returns).
    He had a VAT inspection just before I started working for him and they actually picked up that he hadn't reclaimed the VAT on a chauffeur car he'd purchased so made an adjustment to pay it back to him. Which was nice of them.
  • burgburg Experienced Mentor GloucesterPosts: 1,440Moderator, FMAAT, AAT Licensed Accountant
    slackda wrote: »
    Quote form that site : In addition, the following are not cars for VAT purposes:

    vehicles capable of accommodating only one person or suitable for carrying twelve or more people including the driver.

    but it deosn't clairfy if a bus is actually a commercial vehicle......guess this going to be a call to the VAT helpline.

    This is what I had found. Definitely not a car but is it a commercial vehicle?

    Jodie, thanks. Goes with what I thought but just can't find anything to back it up.
    Regards,

    Burg
  • JmannJmann Feels At Home Posts: 68Registered
    burg wrote: »
    Buses appear to be classed as commercial vehicles for VAT purposes.

    The services supplied by a bus with more than 10 seats is zero rated.

    Would you say the VAT chargeable on the sale/purchase of a bus should be standard rated?

    If so can anyone find any legislation to back this up? I can find nothing specifically relating to buses.

    As far as vat concern Bus is a taxable goods supply. It is not listed in exempt or zero rated hence it is standard rated supply.

    Supply of passenger transport in the UK is zero rated, if any vehicle, ship or aircarft desgined or adapted to carry not less than 10 passenger [VATA 1994, Sch 8 Group 8 Item 4(a)]. You can include driver and crew as a passenger to apply the test.

    However if you just supply/rent / hire bus without the driver or crew then it is standard rated.

    In nutshell buying or selling buses is standard rated supply of goods.

    Supply of passenger transport is either zero rated or standard rated depending on the vehicles carrying capacity and whether driver or crew supplied.

    HTH
  • T JT J Feels At Home Posts: 26Registered
    Toms

    Be careful if you are doing VAT returs for a business that has paying passengers on a bus.

    You may need to operate the "Tour Operators Margin Scheme" for VAT.
  • JmannJmann Feels At Home Posts: 68Registered
    T J wrote: »
    Be careful if you are doing VAT returs for a business that has paying passengers on a bus.

    You may need to operate the "Tour Operators Margin Scheme" for VAT.

    I am afraid TOMS does not apply to bus operator. It applies when you sell a package such as coach transport/air travel, accomodation, food, transer etc then it comes under TOMS otherwise normal vat rule applies.
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