Vat on Car Sale

[Yiannis17]

I have a situation whereby I have a car chauffeur who has just purchased a car under his business under HP and the vat element is claimed back through the next vat return. To purchase this car another car was sold elsewhere to a car dealer and he produced a sales receipt with no vat. Should the vat element of this sale which is quite high as the car proceeds were 40k have been offfste against the purchase of the new car?

Thank you

[pawncob]

https://www.gov.uk/government/publicati ... -hire-cars

[les35]

The one off sale of a used car by the business falls within the margin scheme if he was not charged VAT on the original purchase. If he was charged VAT, then output tax is due at 20%.