VAT increase

[iAmbu]

Hi all

I plan to order a Scirocco to collect at the beginning of March 2010. I am however conscious about the upcoming VAT increase in December this year, back up to 17.5%.

Can anyone tell me when I would need to order the car (and subsequently collect it and take ownership of it), to pay the VAT at 15% and not at 17.5%?

I do not know if the rate which applies is the rate on the day of ordering (and deposit payed), or if it's when the car is registered in the UK and collected by the customer?

Many thanks.

[AL1874]

I don't know for sure but I would think it is the day it is actually paid for because that would be when the garage puts the money through the books.

I know it is a big saving but I would not be happy paying for a car before collection / inspection.

You know what garages are like, once they have your money the service tails away for some strange reason.

[Spiney]

I'd have thought at the very latest, 1st October as VAT should revert on the 31st December giving circa 12 weeks.

If things get tight it MIGHT be possible to pay early before the car arrives although I'd advise researching the rules about this first. They are a tad complicated and I'm not completely sure at what point the VAT due is calculated.

[Andy-GTI]

VAT is calc'd when you pay for it

If you wait til next year you will have to pay the VAT at that time.

Or pay for the car in full before delivery. But then would you happily sit out of £20k plus for months, cos, for example, if the dealer went to the wall you'd lose the lot. . . .

[Spiney]

If things get tight it MIGHT be possible to pay early before the car arrives although I'd advise researching the rules about this first. They are a tad complicated and I'm not completely sure at what point the VAT due is calculated.

Just found this "Each sale has a tax point. This is the date by reference to which a business becomes liable to pay VAT. The tax point is usually the earliest of the date of supply, the date the invoice is issued or the date payment was received."

From this it just MIGHT be possible to get your supplier to issue an invoice before the VAT change. That way is seems that the VAT due would be on the rate prevailing on that date, not when you received the car or when you paid for it.

As I said before though, get advice from someone who knows what they are talking about!!!!

[Herby44]

From this it just MIGHT be possible to get your supplier to issue an invoice before the VAT change.

I very much doubt the dealer would go for this as assuming they raise the invoice in December and they use calendar VAT quarters this will go their December VAT quarter meaning they'll have to pay HMRC by the end of Jan by when the car won't have been paid for!!

Nice work if the dealer does go for it though

Anyway enough accounting - have too much of this during the week

[Evil Derboy]

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[gossa]

Also remember that when VAT goes back up, it might be to 18 or 20% as was reported in the news a little while back. Don't assume that it will be just a 2.5% hike.

[class]

Just as a side note, I'm an accountant and we are hearing strong rumours the VAT will be increased to 20% too...

[mode]

20% in the year before an election unlikely unless its staggered over several future years........