VAT question
11 March 2003, 01:42 PM
#1
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How come you have to pay VAT on second hand parts? Surely the VAT was already paid when the part was bought new so why do you have to pay it twice?
After all, you don't pay VAT on a second hand car, so why do you on second hand parts?
After all, you don't pay VAT on a second hand car, so why do you on second hand parts?
11 March 2003, 01:56 PM
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Because VAT is a tax on adding value. VAT registered dealer buys second hand part for £10 and sells it for £15 and he is obliged to include VAT in the selling price. He claims back the VAT he had to pay when he bought the part for £10. Sadly the fact that it is second hand is immaterial. DL
11 March 2003, 01:56 PM
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VAT is a complicated and wonderful world
There is a scheme entitled "2nd hand goods scheme" IIRC which covers the implications of VAT on 2nd hand goods.
Dont assume they dont pay VAT, as IIRC they actually have to pay VAT over on the margin (profit) they make.
There is a scheme entitled "2nd hand goods scheme" IIRC which covers the implications of VAT on 2nd hand goods.
Dont assume they dont pay VAT, as IIRC they actually have to pay VAT over on the margin (profit) they make.
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