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NeilD
 


Member Since: 01 Dec 2008
Location: Sunny Surrey
Posts: 4845

United Kingdom 2011 Discovery 4 3.0 SDV6 HSE Auto Santorini BlackDiscovery 4

Cant see its LR's issue........its a dealer decision....
 My Youtube Channel http://www.youtube.com/user/NeilDisco#p/u/5/Dz4-Q95GQ2c
Photo Sets http://www.flickr.com/photos/16658684@N08/sets/72157625275139752/ 
 
Post #54171128th Oct 2009 10:35 pm
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Smarticus
 


Member Since: 01 Jan 2005
Location: Northumberland
Posts: 655

2010 Discovery 4 3.0 TDV6 HSE Auto Ipanema SandDiscovery 4

I think LR is involved in the decision as to whether the VAT is at 15% or 17.5%. It all turns on when the "tax point" is. A dealer would struggle to create an output tax point pre 31 Dec 2009 on a vehicle that hasn't yet been invoiced to them by LR (input tax point). There are a lot of people in the whole vehicle supply chain asking the same questions about tax points around 31 December 2009 and, as far as I am aware, no one has yet a definitive answer on how Her Majesty's people are going to treat this. Dealers, naturally, dont want to take the risk of invoicing customers at 15% to then have HMR&C claw back 17.5% from them. On a £45k deal that extra 2.5% could make a big hole in the dealers profit margin. On many cars that may well be all of the margin.

I'll check up with a couple of VAT specialists to see if there is a definite answer - or at least a work around - on this one yet.
 Disco 4 TDV6HSE
Defender 200TDi CSW
RR Evoque 
 
Post #54183429th Oct 2009 8:40 am
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Ecosse
 


Member Since: 07 Jan 2005
Location: Grampian, Scotland
Posts: 889


ac wrote:
Does anyone know for certain yet if raising an invoice prior to 31 Dec is possible and whether dealers can/will do it?


I spoke to HMRC's helpline & they were adament that as long as the parties were not associated, <100k and paid for within 6 mths of invoice, the raising of an invoice changed the tax point to that date. I explained specifically what the issue was & they were certain of it but flagged up that it was up to the seller if they wanted to raise the vat invoice ahead of delivery and that it then created a liability on the dealer to pay the vat on their next vat quarter end.
Dealers all appear to be playing it safe though - or perhaps they & the manufacturers are just milking the situation to enable them to push pre-31/12 sales & therefore cashflow Shocked
  
Post #54183829th Oct 2009 8:45 am
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dejongj
 


Member Since: 13 Sep 2009
Location: Whipsnade
Posts: 33

United Kingdom 

Its one thing doing it for services, but for goods not yet supplied nor build it very grey. Also whilst doing that could there could be a problem in recognising the revenue, yet there is a liability on the balance sheet. When operating in a grey area the intent of doing this is very clear, there is no reasonable business reason for doing this other than avoiding tax. Tax avoidance is ofcourse not illegal, but you do put yourself in the hands of a regional inspector.
 Jean-Paul  
Post #54221629th Oct 2009 10:26 pm
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Ecosse
 


Member Since: 07 Jan 2005
Location: Grampian, Scotland
Posts: 889


dejongj wrote:
Its one thing doing it for services, but for goods not yet supplied nor build it very grey..... there is no reasonable business reason for doing this other than avoiding tax.


There is nothing unusual in a business invoicing & requesting payment in advance of goods being available - indeed this is commonplace for special orders in many businesses as they could otherwise manufacture goods that are not readily re-saleable and then find the buyer disappears. With cars, although they are resaleable, the individual spec/options may create an issue for ease of sale & in any event be surplus to the dealer's normal stock levels.
What surprises me is that HMRC have not produced an advice note setting out their position - it's almost as if they want to cause a situation of uncertainty. Shocked
  
Post #54250230th Oct 2009 12:46 pm
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dejongj
 


Member Since: 13 Sep 2009
Location: Whipsnade
Posts: 33

United Kingdom 

Absolutely right, but in this context the reason for it is very clear avoid tax. That's the challenge. Avoiding tax is not illegal, but that doesn't mean it won't be challenged and could be demanded of the supplier since they can't get it from the buyer!
 Jean-Paul  
Post #54252730th Oct 2009 1:12 pm
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Ecosse
 


Member Since: 07 Jan 2005
Location: Grampian, Scotland
Posts: 889


[quote="dejongj"]Absolutely right, but in this context the reason for it is very clear avoid tax.
quote]

Nothing legally wrong with that - accountants make large profits from providing businesses & individuals with advice on how to legally avoid or mitigate tax Shocked

The relevent regs are set out at Sections 14 & 30 of the VAT Guide at http://customs.hmrc.gov.uk/channelsPortalW..._CL_001596 (it's a 5+mb file) for anyone wanting to check.
  
Post #54254030th Oct 2009 1:27 pm
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dejongj
 


Member Since: 13 Sep 2009
Location: Whipsnade
Posts: 33

United Kingdom 

I did not say it is illegal, I used especially avoidance opposed evasion. The challenge is that just because it is not illegal that doesn't mean it is alloweable! When investigated the behaviour will be tested against normal business practise and behaviour.

It is a very grey area and in those areas it can swing both ways. Just like the period when the vat was reduced.
 Jean-Paul  
Post #54256930th Oct 2009 2:17 pm
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Supercharged
 


Member Since: 07 Oct 2006
Location: Northants
Posts: 171

United Kingdom 2010 Discovery 4 3.0 TDV6 HSE Auto Zermatt SilverDiscovery 4

I have 7 acres and became a Farmer / Grower member of the NFU. I think I could have done this with less land, and maybe none at all. Worth asking.

However, the dealer told me that the rules say that you cannot combine NFU discount with LR's 60/40 0% finance. They realised too late after we had done the deal, so I did actually get both Smile although dealer not happy.
 Paul

D4 HSE Zermatt Silver / Ebony 
 
Post #54272030th Oct 2009 5:16 pm
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