BRAND NEW to the game.... bit of advice with VAT.

[TommyP 0]

Hi All,

So I’ve just taken the step to set up my own Dealership, up north selling mainly commercials with the odd car on the side. 

Brand Spanking New and obviously haven’t hit the VAT threshold yet. 

So my question is, 

I’m selling commercials with NO VAT which on vans seems to be a bit of a put off and also you look more expensive in search and find yourself lower down the page. 

I wanted to enjoy quarter or two not paying VAT whilst under the threshold but am I just delaying the inevitable and screwing my self over at the same time?

Thanks in advance,

Tom

[EPV 631]

Looks a familiar story to me...

Chaps, I can vouch for Tom as a serious newbie, not a "car sales is ez money lolz" type, help him where you can! 

[TommyP 0]

Cheers mate  much appreciated 

[Nick M.K. 574]

23 minutes ago, TommyP said:

I wanted to enjoy quarter or two not paying VAT whilst under the threshold but am I just delaying the inevitable and screwing my self over at the same time?

Do you mean that you currently buy a van + VAT, then sell it without the ability to add VAT on top of the sale price?

It might be better to stick to margin vehicles (even margin vans) for the couple of months that will take you to reach the threshold. Then you can actually have some benefit of not having to pay that VAT. As it stands if the answer to my question is YES you pay that VAT in advance without ability to recover it. 

[David Horgan 564]

Buy a van with VAT and sell with the vat because you have paid it on purchase . WHY would I as a van buyer thats VAT registered buy from you then because you cant give me a VAT invoice to claim it back .

I would move on from your advert if i was looking . Then buy from a Vat registered trader .  

 

Only works if your car trading but not VANS . 

Edited April 26, 2019 by David Horgan

[TommyP 0]

1 hour ago, Nick M.K. said:

Do you mean that you currently buy a van + VAT, then sell it without the ability to add VAT on top of the sale price?

It might be better to stick to margin vehicles (even margin vans) for the couple of months that will take you to reach the threshold. Then you can actually have some benefit of not having to pay that VAT. As it stands if the answer to my question is YES you pay that VAT in advance without ability to recover it. 

Hi Nick,

So I currently buy vans from auction and get charged VAT (obviously). 

Agree with the second point about selling cars (marginal vans are hard to come by from what I can see) but I do quite like the thought of Vans Vs cars

I was speaking to EPV the other night about this and it’s a difficult one! 

8 minutes ago, David Horgan said:

Buy a van with VAT and sell with the vat because you have paid it on purchase . WHY would I as a van buyer thats VAT registered buy from you then because you cant give me a VAT invoice to claim it back .

I would move on from your advert if i was looking . Then buy from a Vat registered trader .  

Yes this is my worry, although I have sold a few I’m wondering how many customers I’m turning away behind the screens! 

[David Horgan 564]

3 minutes ago, TommyP said:

I’m wondering how many customers I’m turning away behind the screens

Rather more than you think i would imagine .

[It's me 615]

theres many a small one man/woman/genderless person un vat- d  registered who just wants a low priced van for his water tank in the back for his window cleaning round and doesnt want to pay the vodka and tonic etc

 

so its a 2 edged swordy..........

[TommyP 0]

Just now, jason doyle motor sales said:

theres many a small one man/woman/genderless person un vat- d  registered who just wants a low priced van for his water tank in the back for his window cleaning round and doesnt want to pay the vodka and tonic etc

 

so its a 2 edged swordy..........

Agree and the vans I’ve sold so far have been to exactly that. 

And vans sub £3K I think there are no issues with not being VAT reg, but when you start looking at £4 - £5 I’m finding typically the buyers are VAT Registered, but I am pricing them competitively with those that are VAT Reg so it almost doesn’t matter if you get my drift? 

 

[It's me 615]

1 minute ago, TommyP said:

Agree and the vans I’ve sold so far have been to exactly that. 

And vans sub £3K I think there are no issues with not being VAT reg, but when you start looking at £4 - £5 I’m finding typically the buyers are VAT Registered, but I am pricing them competitively with those that are VAT Reg so it almost doesn’t matter if you get my drift? 

 

get what you can

thing with cheap vans was they always sold if they were mint where the driver sat,they didnt used to bother too much about dings and dents but i am talking years ago

realistically a man who looks for a 3 grand van doesnt get much choice other than tatty high mileage dodgy stuff so you might just have found your niche

[MarkTVS 209]

I always seem to struggle with newer vans, old sub 3k stuff I could sell all day long but got a lovely 64 plate transit with all the spec and no vat but not many enquiries on it yet.

[Lazz 16]

If I was starting fresh and going to sell vans from the start I would of registered for vat from the word go because of how vans and vat work, I am surprised your accountant did not mention it.

if I was starting out only selling margin cars I would not register until I had hit the vat threshold.

the few vans I have sold have always been sub 3k with no vat and have always sold quite easily.

[Rory RSC 596]

Buying cheap vans with no vat is harder than sourcing cars

[Max Branning 149]

If you are mainly doing commercials then makes sense to register. It will just make things simpler going forward.

Buy van + vat = sell van +vat.

 

[Mark101 536]

1 hour ago, Max Branning said:

If you are mainly doing commercials then makes sense to register. It will just make things simpler going forward.

Buy van + vat = sell van +vat.

 

This

I love selling + VAT vans - no VAT margin eating into your profits.

[Arfur Dealy 823]

7 hours ago, TommyP said:

 

I wanted to enjoy quarter or two not paying VAT whilst under the threshold but am I just delaying the inevitable and screwing my self over at the same time?

Hi Tom, if you think your turnover will be over the VAT threshold within a 12 month period, then you should declare and register immediately. You cannot wait until you are at the limit and then register, it doesn't work like that.  

I've always done well with vans when I have taken them in as PX, don't tend to buy them regularly for stock but had a few cheap battered T5's. You'll find most +vat vans will sell well under book at auction and margin vans will sell well over, they tend to equal out especially on T5's..

Edited April 26, 2019 by Arfur Dealy

[Mark101 536]

10 minutes ago, Arfur Dealy said:

You cannot wait until you are at the limit and then register, it doesn't work like that.  

 

You can and I did - most profitable time in the job and it is a one off.

[Arfur Dealy 823]

1 minute ago, Mark101 said:

You can and I did - most profitable time in the job and it is a one off.

https://www.gov.uk/vat-registration/when-to-register

When to register

You must register for VAT if your VAT taxable turnover goes over £85,000 (the ‘threshold’), or you know that it will.

[Mark101 536]

2 minutes ago, Arfur Dealy said:

https://www.gov.uk/vat-registration/when-to-register

or you know that it will.

I didn't know Guv 

[Arfur Dealy 823]

5 minutes ago, Mark101 said:

I didn't know Guv 

If you know your business is going to clearly exceed the thresh hold you must register immediately... If.... all of a sudden you have an UPSURGE in business and think you are going to hit it, then this rule applies. 

You must register if you realise that your total VAT taxable turnover is going to be more than £85,000 in the next 30-day period.

[Mark101 536]

10 minutes ago, Arfur Dealy said:

If you know your business is going to clearly exceed the thresh hold you must register immediately... If.... all of a sudden you have an UPSURGE in business and think you are going to hit it, then this rule applies. 

You must register if you realise that your total VAT taxable turnover is going to be more than £85,000 in the next 30-day period.

To be honest Simon.  I was dipping my toe when I first started whilst half looking for another job after throwing my toys out in the boardroom and suddenly and (if I am honest) unexpectedly started making a bit, then a bit more and before I knew it had a dozen cars and exceeded the threshold.  HMRC were very good and simply backdated me to the point at which I exceeded the £85k T/O threshold.  

There's no turning back now though, fully committed, 6 year lease, first employee, just sold a rental property for some cash injection to ramp up - looking now at a second unit.

Oh, what 12 months can bring.

[Arfur Dealy 823]

Fantastic Mark, if you keep the same business model you’ll fly, are you going to keep it in one platform with two sites ? 

[Mark101 536]

14 minutes ago, Arfur Dealy said:

Fantastic Mark, if you keep the same business model you’ll fly, are you going to keep it in one platform with two sites ? 

The unit next door is 4 times the size of mine - I am considering filling that with stock (hold 25 without having to move any cars to get one car out).  It is about £3,000 a month + £1,000 where I am now.

Not sure whether to stay as I am, move into the bigger one or keep both and use one as a prep, workshop and take a spanner on or keep things light

The landlord is happy for me to open a workshop despite them not liking motor trade, he says I keep the place spotless and I am unlike any other trader he has met/dealt with (and since banned motor trade) or of course, he could just be blowing smoke up my arse.

The other option is, we sell all properties and cash in to one big pad and revert to trading from home but one like TV talks about (about £600-700k) with land, easily achievable where I live (before all the S Easters pipe up about property prices and how that wouldn't buy a 1 bed flat ).

I am committed to making this work, balls in etc - the past 2 months (I know it isn't really long enough to form a true picture) has made me realise how scaleable the business is.

 

Edited April 26, 2019 by Mark101

[Arfur Dealy 823]

My dream is a farm with a couple of acres and a couple a very large barns...

But now I have 4 & 5 year olds. Time is so precious 

 

[Mark101 536]

4 minutes ago, Arfur Dealy said:

My dream is a farm with a couple of acres and a couple a very large barns...

But now I have 4 & 5 year olds. Time is so precious 

 

So, you have 2 valeters.

My daughter gave birth to my second (her first child) grandchild at 3pm today  and my other daughter is due her second child, my third grandchild in August this year.

 

Edited April 26, 2019 by Mark101