Extended Warranty Advice - VAT

[Mark101 536]

Hoping someone may be able to help me?

I self warranty, administered by A1 Approved.

Chap wants to extend his warranty for 12 months, which I am "ok" with but would rather not.

Normally on an insurance backed scheme, I would not charge VAT becuase I understand there to be IPT instead but as this is my own scheme - do I had VAT to the warranty?

Thanks chaps.

[Earunder 69]

We invoice extended warranties separate to the vehicle sales invoice.  We then charge the customer the VAT on the extended warranty.  I find It's an easier way as it keeps everything separate and simple.  We use The Auto Group who have been very good over the last 2-3 years.

[MattR 177]

Hi Mark

 

even though it is a warranty you are selling the car for, in effect, more money, so the difference between what you would have sold the car for and what you are selling it for, is an increased margin. so if you are charging say 240 for the warranty, 40 of that goes to the vat man.

[L-P 15]

Hi Mark,

I always charge VAT when I sell an extended warranty.

 

Cheers

Simon

 

Edited February 26, 2019 by L-P

[Max Branning 149]

You do not have to extend the warranty though if you do not want to.

Just give your own 3 months as standard and thats it. If the customer wants to buy an insurance backed warranty separately for whatever term they choose then thats up to them, let someone else deal with them !

[Mark101 536]

Thanks Chaps

Thought so - just increased my prices 

[Lucas 9]

Found a page about this. 

The supply of a non-insurance warranty by a UK business will be liable to VAT at the standard rate.

Look at item 3.7.3 in this link

https://www.gov.uk/guidance/insurance-notice-70136

Edited February 26, 2019 by Lucas