VAT on a new Morgan?
Discussion
I am in the fortunate position of having put a deposit down on a brand new Morgan +4 quite some time ago .
I wont be taking delivery of the car until March/April time. The chap at Morgan has told me that it wont be possible to pay now to avoid the VAT rise and that I will have to pay the 17.5% rate!....The car wont actually be manufactured until next year (after the tax has gone up) I dont agree with him!
Reading the Telegraph Financial paper this morning it says this on the front page:
" VAT rules say anything costing less than £100,000 can be bought now ahead of the rate increase, and you dont need to take delivery until up to six months later- so we can pay for a car before December but still get the benefit of the new number plates in March."
That statement to me says that there is nothing stopping me buying the car now, paying the current VAT rate and then collecting the car in the new year once it has been built.
Does anyone actually understand the VAT rules for this particular situation? Can I "buy the car now" and pay the current VAT rate? Do I have to pay for the car in full NOW, or can I simply pay a deposit now and the rest on collection to ensure I get the 15% rate? Either way it makes no odds to me.
What I want to do is buy this car at 15% VAT... it will save around £800....which is a years supply of fuel for the car!
Anyone have any links to the actual wording that I can use to prove to the sales chap?
Help much appreciated
I wont be taking delivery of the car until March/April time. The chap at Morgan has told me that it wont be possible to pay now to avoid the VAT rise and that I will have to pay the 17.5% rate!....The car wont actually be manufactured until next year (after the tax has gone up) I dont agree with him!
Reading the Telegraph Financial paper this morning it says this on the front page:
" VAT rules say anything costing less than £100,000 can be bought now ahead of the rate increase, and you dont need to take delivery until up to six months later- so we can pay for a car before December but still get the benefit of the new number plates in March."
That statement to me says that there is nothing stopping me buying the car now, paying the current VAT rate and then collecting the car in the new year once it has been built.
Does anyone actually understand the VAT rules for this particular situation? Can I "buy the car now" and pay the current VAT rate? Do I have to pay for the car in full NOW, or can I simply pay a deposit now and the rest on collection to ensure I get the 15% rate? Either way it makes no odds to me.
What I want to do is buy this car at 15% VAT... it will save around £800....which is a years supply of fuel for the car!
Anyone have any links to the actual wording that I can use to prove to the sales chap?
Help much appreciated
Whenever a VAT rate changes, there are "Transitional Arrangement" to cover circumstances such as this where a transaction straddles a time period in which the old and new rates might apply.
Normally, placing an order BEFORE the rate change and taking delivery and being invoiced AFTER the introduction of the new rate will be subject to the NEW rate.
Deopending on the nature of the goods and services being supplied there MAY be the option of applying the old rate. However, taking a delivery of a single product (such as a car) almost definitely would not count.
Normally, placing an order BEFORE the rate change and taking delivery and being invoiced AFTER the introduction of the new rate will be subject to the NEW rate.
Deopending on the nature of the goods and services being supplied there MAY be the option of applying the old rate. However, taking a delivery of a single product (such as a car) almost definitely would not count.
Did you have the final price of the car when you paid the deposit ? Surely that is the price you will be expected to pay ?
I'd speak to someone else at Morgan, he sounds like he's being a lazy sod. Surely they'd rather have the money in their pockets sooner rather than later, after all the difference in VAT you mention isn't going to them anyway.
The only other possible reason is they are planning a price increase, which surely you would have known about.
Aside, my dad had a Morgan, it was ace. You'll soon spend that 800 on a flying jacket, goggles, enamel Union Jack, leather bonnet strap etc. etc.
I live in Oslo, and there's a couple near me. Just saw a nice off white one wheel spinning on ice cold tram tracks !
I'd speak to someone else at Morgan, he sounds like he's being a lazy sod. Surely they'd rather have the money in their pockets sooner rather than later, after all the difference in VAT you mention isn't going to them anyway.
The only other possible reason is they are planning a price increase, which surely you would have known about.
Aside, my dad had a Morgan, it was ace. You'll soon spend that 800 on a flying jacket, goggles, enamel Union Jack, leather bonnet strap etc. etc.
I live in Oslo, and there's a couple near me. Just saw a nice off white one wheel spinning on ice cold tram tracks !
I think there is only a 14 day transition period.
Otherwise, you have to pay the VAT at the Tax Point date - which is the date the invoice is issued for the sale. That NORMALLY happens at the point of delivery.
I am pretty sure the Morgan man is correct.
No matter what Morgan do reagrding the price they agree with you, the ultimate situation is that THEY will have to pay over VAT at 17.5% to HMRC.
Otherwise, you have to pay the VAT at the Tax Point date - which is the date the invoice is issued for the sale. That NORMALLY happens at the point of delivery.
I am pretty sure the Morgan man is correct.
No matter what Morgan do reagrding the price they agree with you, the ultimate situation is that THEY will have to pay over VAT at 17.5% to HMRC.
Edited by Eric Mc on Sunday 13th December 16:16
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