There is no vat element in the sale price of a used bike. If there is, would a vat registered buyer be able to claim the vat back? As for dealer paying vat on the profit, even if they get their asking price, it still might be sold at a loss. Ken.
Ken, I can only tell how it is in Germany (and due to this thread, it really was the first time I inquired about this): As a ‚VAT‘registered buyer, you can claim it back but for this, the professional seller of a used bike has to explicitly display the VAT on the sales-form. They usually do not display it there when selling used to private customers just because they are not required to by law, which for example was noted on the contract I got when buying a used car 3 years back.
I understand what you’re saying Winglad, now, could you answer my previous question : If a vat registered person (Not a bike dealer) buys a used bike, can he claim any vat back on it? Regards,Ken.
What our @dilligaf is a professional tinkerer of the highest standing. He would never leave loose bits of missing items. Wash your mouth out @SleepyOwl
With us if a vat registered person buys a used bike from another vat registered person, if the buyer is going to use the bike for his business (i.e. riding it to and from his place of business) the VAT can be claimed. If the bike was previously owned by a non vat registered person there is no claimable VAT, and if the bike is sold by a bike dealer vat is only calculated on the profit (margin) that he makes.
Well, since I am a total amateur when it comes to taxes, I did my best at trying to answer your question with my above comment: As a ‚VAT‘registered buyer, you can claim it back but for this, the professional seller of a used bike has to explicitly display the VAT on the sales-form. But if this did not answer it, then I must admit that I can not answer it... Sorry. I have a friend, he is part of the German speaking minority in northern Italy (Südtirol). Whenever he is doing his income-tax he also in parallel denounces himself with the feds. This is to prevent them from accusing him of fraud. Lots of Italian (honest) businessmen do. In Germany, the tax system is also quite confusing. So please bear with me, if I cannot deliver. Did not mean to provoke. The whole topic just left me curious...
Vulpes, Thanks for trying to answer my question. Your second sentence seems to contradict the first one. Or are you saying that if some guy, say a vat registered joiner buys a bike you would charge him vat on top of the advertised price? Things with vat in the price have to be advertised as, either +VAT, or, INCLUDING VAT. I think, the bottom line is, there is no vat in the selling price of most used bikes being resold. Only the first (none trader), ie. owner/ keeper pays the vat levied against the bike. Once the vat has been paid, no one else pays vat on the vehicle. So what I said before about the ex dilligaf bike being sold used for more than it cost new was correct. Or am I totally wrong? Not trying to be a pedant here, but would just like to know how this thing works. Thanks again for your answer. Cheers,Ken.
Winglad, I too am just trying to understand (And not provoke) the system and it seemed simple until vat on profit but not machine was introduced. Thanks for your input. I’m gone Ken.
There IS vat in the selling of a used bike, if that bike is being sold by a trader. You just do not see it when sold to a non-trader. When sold trade to trader the vat will be stated, and can be claimed by the buyer. When a trader buys a bike from a non trader and sells it on, he'd have to add vat to his profit margin. So if the bike was bought for 6000 and sold for 6500, the vat would be 21% (in NL) of 500. I'm sorry if I'm not clear on this - a bit difficult to explain in a language not your own...
Just had a phone call from Eric at Newcastle Triumph and CERBERUS has been sold New owner is picking it up on Saturday
Relevant UK VAT Notice https://www.gov.uk/guidance/the-margin-scheme-on-second-hand-cars-and-other-vehicles-vat-notice-7181
I just think that the customer service is wonderful, how to piss off your customer after him having to part with his dream bike for health reasons. And at a significant loss to him and good profit to the dealer.....
