VAT on purchase and sale of ex-lease car?
Davina W
Registered Posts: 3 New contributor 🐸
Hi
This is my first post on here so I apologise if its in the wrong place - I have moved this from the level 4 discussion board. I have very recently completed level 4 but haven't finished my application for MAAT yet so could only find an option to post as a student.
I would be grateful if someone could someone help me to determine the correct treatment of a purchase and sale of an ex-lease car please?
I work for a vehicle hire company, we lease in vehicles which are then hired out to customers. A car that has been out on long term hire was returned damaged by our customer and therefore the rental company that we leased it from will not take it back - we have to purchase it then resell it. The rental company have sent us an invoice for the vehicle which shows VAT at 20% and we also have a potential buyer. My manager feel sure that because the car was leased to us that we will not be able to re-claim the VAT on the purchase and that we should not charge VAT on the sale either. I've looked at the "Margin Scheme" on the HMRC website but I think this is optional. Can anyone point me in the right direction?
This is my first post on here so I apologise if its in the wrong place - I have moved this from the level 4 discussion board. I have very recently completed level 4 but haven't finished my application for MAAT yet so could only find an option to post as a student.
I would be grateful if someone could someone help me to determine the correct treatment of a purchase and sale of an ex-lease car please?
I work for a vehicle hire company, we lease in vehicles which are then hired out to customers. A car that has been out on long term hire was returned damaged by our customer and therefore the rental company that we leased it from will not take it back - we have to purchase it then resell it. The rental company have sent us an invoice for the vehicle which shows VAT at 20% and we also have a potential buyer. My manager feel sure that because the car was leased to us that we will not be able to re-claim the VAT on the purchase and that we should not charge VAT on the sale either. I've looked at the "Margin Scheme" on the HMRC website but I think this is optional. Can anyone point me in the right direction?
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Comments
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Hi
I have now resolved this issue. Thank you to everyone that viewed my question.0 -
In the end it was very simple! As our supplier has charged VAT on the invoice we can reclaim this, but we must pay VAT to HMRC on the sale :-)1
