Reclaiming/repaying VAT on used car export
Discussion
Strange one which I need some help with. I've tried reading the HMRC website, but you know how difficult that can be to negotiate.
I'm used to dealing with VAT qualifying cars that are being exported to mainland Europe where on proof of an EU VAT number we can sell a car without VAT and mark it on our stock books as exempt because it was exported.
However, we've got a used VAT qualifying car here that someone wants to export to Pakistan. He's a dealer/business here who buys cars specifically to export.
What he's always done in the past, apparently, is buy a car and arrange for it to be shipped. Once the boooking has been made he goes back to the dealer he bought the car from and gets a cheque back from them for the VAT element.
Does that sound right to anyone?
It's not a new means of transport as it's a used car.
It's not a foreign visitor buying something to take home with them as he's an established business here.
It's not us arranging the export to a foreign customer as we would be selling it to his UK business/address.
Any help/ideas would be greatly appreciated.
Oh, and mods - if you think this would be better in the business forum feel free to move it.
I'm used to dealing with VAT qualifying cars that are being exported to mainland Europe where on proof of an EU VAT number we can sell a car without VAT and mark it on our stock books as exempt because it was exported.
However, we've got a used VAT qualifying car here that someone wants to export to Pakistan. He's a dealer/business here who buys cars specifically to export.
What he's always done in the past, apparently, is buy a car and arrange for it to be shipped. Once the boooking has been made he goes back to the dealer he bought the car from and gets a cheque back from them for the VAT element.
Does that sound right to anyone?
It's not a new means of transport as it's a used car.
It's not a foreign visitor buying something to take home with them as he's an established business here.
It's not us arranging the export to a foreign customer as we would be selling it to his UK business/address.
Any help/ideas would be greatly appreciated.
Oh, and mods - if you think this would be better in the business forum feel free to move it.
Sounds ok to me but you could be liable if the car doesn't ship. You need proof of export - I am sure you're used to all that.
Might be worth a call checking customs declarations before refunding.
http://www.hmrc.gov.uk/vat/sectors/motors/selling-...
<<Sending vehicles abroad
As long as you meet certain conditions, you can zero rate the supply of a new or used vehicle to any of the following:
a customer in a country outside the EU
someone who isn’t registered for VAT who will take a new car to another EU country
a VAT-registered business in the EU
However, if you're selling a second-hand vehicle under the Margin Scheme to someone in the EU, then you must account for UK VAT on your margin. It doesn't matter whether or not your customer is VAT-registered.
Also, if you’re selling a used car to someone in the EU who isn’t VAT-registered, and you were charged VAT on the purchase of the car - a 'qualifying car' - then you must account for VAT on the full selling price.
There’s a special scheme for sales of new, used and Margin Scheme vehicles for individuals who intend to leave the EU. It's called the Personal Export Scheme (PES).
There’s also a special scheme for sales of new vehicles to individuals who are taking the vehicle to another country within the EU. These vehicles are referred to as New Means of Transport (NMT).>>
Done poe and exports, done vat on cars - but never together ! Call the vat office - they will help you....
Might be worth a call checking customs declarations before refunding.
http://www.hmrc.gov.uk/vat/sectors/motors/selling-...
<<Sending vehicles abroad
As long as you meet certain conditions, you can zero rate the supply of a new or used vehicle to any of the following:
a customer in a country outside the EU
someone who isn’t registered for VAT who will take a new car to another EU country
a VAT-registered business in the EU
However, if you're selling a second-hand vehicle under the Margin Scheme to someone in the EU, then you must account for UK VAT on your margin. It doesn't matter whether or not your customer is VAT-registered.
Also, if you’re selling a used car to someone in the EU who isn’t VAT-registered, and you were charged VAT on the purchase of the car - a 'qualifying car' - then you must account for VAT on the full selling price.
There’s a special scheme for sales of new, used and Margin Scheme vehicles for individuals who intend to leave the EU. It's called the Personal Export Scheme (PES).
There’s also a special scheme for sales of new vehicles to individuals who are taking the vehicle to another country within the EU. These vehicles are referred to as New Means of Transport (NMT).>>
Done poe and exports, done vat on cars - but never together ! Call the vat office - they will help you....
Thanks for your help folks but, either I'm not reading it correctly or I'm being a dunce. Let's face it, both possible.
Most of that information relates to zero rating the vehicle where the customer is overseas.
In this case the person who would be buying the car is a UK business and he doesn't want the vehicle zero rated he wants a cheque back for the VAT amount once it's been exported. We would have no connection/dealings with the overseas person in any way.
Looks like it may be a call to them to try and get a clear answer as suggested.
Most of that information relates to zero rating the vehicle where the customer is overseas.
In this case the person who would be buying the car is a UK business and he doesn't want the vehicle zero rated he wants a cheque back for the VAT amount once it's been exported. We would have no connection/dealings with the overseas person in any way.
Looks like it may be a call to them to try and get a clear answer as suggested.
Roo, deleted my last post as your previous reply snuck in before I posted it.
If he's UK based, the VAT is no different to any other transaction in the UK - you can't zero rate them. If he then goes on to export the goods outside of the EU, the VAT is for him to process, not you, unless it qualifies as an indirect export as per this link http://customs.hmrc.gov.uk/channelsPortalWebApp/ch... and http://www.businesslink.gov.uk/bdotg/action/detail...
You'd need to be exporting the goods to zero rate / reclaim VAT on them otherwise.
If he's UK based, the VAT is no different to any other transaction in the UK - you can't zero rate them. If he then goes on to export the goods outside of the EU, the VAT is for him to process, not you, unless it qualifies as an indirect export as per this link http://customs.hmrc.gov.uk/channelsPortalWebApp/ch... and http://www.businesslink.gov.uk/bdotg/action/detail...
You'd need to be exporting the goods to zero rate / reclaim VAT on them otherwise.
Edited by Stu R on Tuesday 4th September 16:56
Stu R said:
Roo, deleted my last post as your previous reply snuck in before I posted it.
If he's UK based, the VAT is no different to any other transaction in the UK - you can't zero rate them. If he then goes on to export the goods outside of the EU, the VAT is for him to process, not you, unless it qualifies as an indirect export as per this link http://customs.hmrc.gov.uk/channelsPortalWebApp/ch... and http://www.businesslink.gov.uk/bdotg/action/detail...
You'd need to be exporting the goods to zero rate / reclaim VAT on them otherwise.
Stu,If he's UK based, the VAT is no different to any other transaction in the UK - you can't zero rate them. If he then goes on to export the goods outside of the EU, the VAT is for him to process, not you, unless it qualifies as an indirect export as per this link http://customs.hmrc.gov.uk/channelsPortalWebApp/ch... and http://www.businesslink.gov.uk/bdotg/action/detail...
You'd need to be exporting the goods to zero rate / reclaim VAT on them otherwise.
Edited by Stu R on Tuesday 4th September 16:56
Thanks for that, it's confirmed what I was thinking.
If the person I supply to is a UK customer and he exports it and does all the paperwork he's responsible for the VAT elemnet.
No worries.
From what you've said, I couldn't think of any legal way of getting it through as a zero-rated indirect export that wouldn't leave you on seriously wobbly ground should HMRC come knocking. If he was just brokering the sale both your lives woud be much easier as the VAT liability is much more transparent, but as he's taking title to the goods in the UK it's clearly falling short of the 'we'll bum you if you zero rate products delivered to / collected by UK customers at a UK address' rule.
From what you've said, I couldn't think of any legal way of getting it through as a zero-rated indirect export that wouldn't leave you on seriously wobbly ground should HMRC come knocking. If he was just brokering the sale both your lives woud be much easier as the VAT liability is much more transparent, but as he's taking title to the goods in the UK it's clearly falling short of the 'we'll bum you if you zero rate products delivered to / collected by UK customers at a UK address' rule.
Roo said:
Stu R said:
Roo, deleted my last post as your previous reply snuck in before I posted it.
If he's UK based, the VAT is no different to any other transaction in the UK - you can't zero rate them. If he then goes on to export the goods outside of the EU, the VAT is for him to process, not you, unless it qualifies as an indirect export as per this link http://customs.hmrc.gov.uk/channelsPortalWebApp/ch... and http://www.businesslink.gov.uk/bdotg/action/detail...
You'd need to be exporting the goods to zero rate / reclaim VAT on them otherwise.
Stu,If he's UK based, the VAT is no different to any other transaction in the UK - you can't zero rate them. If he then goes on to export the goods outside of the EU, the VAT is for him to process, not you, unless it qualifies as an indirect export as per this link http://customs.hmrc.gov.uk/channelsPortalWebApp/ch... and http://www.businesslink.gov.uk/bdotg/action/detail...
You'd need to be exporting the goods to zero rate / reclaim VAT on them otherwise.
Edited by Stu R on Tuesday 4th September 16:56
Thanks for that, it's confirmed what I was thinking.
If the person I supply to is a UK customer and he exports it and does all the paperwork he's responsible for the VAT elemnet.
Gassing Station | Finance | Top of Page | What's New | My Stuff