Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Readers’ forum: VAT on a vintage vehicle

29 September 2020
Issue: 4762 / Categories: Forum & Feedback
VAT on the sale of a secondhand bus.

A client buys and sells buses and incorporated his business some years ago after having previously operated as a sole trader. The sole trader business owned a vintage bus which it transferred to the company with a value of £25 000. It is now being sold for £20 000 to a private buyer. The client cannot remember how much he paid for the bus and whether he paid VAT when he bought it in 2009 (he thinks not). He only keeps his business records for six years.

Can the company ignore VAT because it is a secondhand vehicle being sold at a £5 000 loss so no margin tax is due? If this is incorrect how should the company deal with VAT on the sale? It seems wrong to charge 20% VAT although the reality is that the sale will be for £20 000 including VAT...

If you or your firm subscribes to Taxation.co.uk, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.

back to top icon