# VAT increase



## stephenpug (Sep 18, 2008)

We have ordered a new motorhome at the nec show last October paid a deposit and put our old motorhome in part-ex now the vat has gone up 2.5% we are being told by the dealership we have to pay the extra on the whole motorhome 30 odd thousand pound and not the £8000 outstanding i even tried to pay the outstanding sum off but they said it would make no difference but in Practical Caravan magazine it states "1-if you make full payment by 31/12/09 you will pay only 15% vat,2-pay your deposit before 31/12/09 and the outstanding balance within six months of the invoice date (issued in 2009)and you will pay only 15% vat" but the dealership insists i pay the full amount has anybody got any ideas as to how i should proceed as it is a difference of £700 better in my pocket cheers Steve


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## DABurleigh (May 9, 2005)

VAT is accounted for on a deposit, pre-payment, or full payment basis at the rate in force when it is received.

So it your choice whether or not to take the risk and pay all the money up front in order to minimise the VAT bill.

http://www.hmrc.gov.uk/VAT/forms-rates/rates/rate-rise-guidance.pdf

Dave


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## Zebedee (Oct 3, 2007)

As I understand it, being in a similar position, it all hinges on exactly when the makers of the new van invoice the dealer.

If the dealer is invoiced before 31st Dec, and you also pay him in full before that date, you will pay only 15% VAT.

If the dealer does not have his invoice he can't raise one for you before the deadline, so you cannot pay in advance of that date and avoid the extra VAT.

Having to pay 17.5% on the whole whack seems a bit harsh, but I suppose it's legally correct, since you could (would!!) pay a deposit of 99% of the purchase price . . . . and fiddle the Chancellor out of his unjust desserts! :evil: :evil: :evil: 

Hope this helps

Dave


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## Mike48 (May 1, 2005)

There was an article on this in a recent Caravan Club magazine. I copied it because I'm in a similar position. It states:

"The Club's legal helpline advises that if you pay for the caravan completely before 1 January you will be charged the lower rate of VAT. It is the date of the invoice which is relevant. So if you put down a deposit before 1 January the initial invoice would be at the lower rate of VAT but if you paid the balance in February on delivery of the caravan the final invoice would be at the higher VAT rate."

I notice that Marquis say on their website that if you order and pay for a vehicle prior to 1 January the vehicle will be at the lower VAT rate.

What is unclear is that if you put down a deposit in say October do you pay the increased rate on the balance outstanding or on the total cost of the vehicle?


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## dovtrams (Aug 18, 2009)

Your dealer is wrong and the information sheet provided to businesses by HMRC clearly states this. The effective date is the date of the invoices for each part of the transaction. if they are all issued in 2009 VAT is charged at the prevailing rate ie 15%. when you pay the invoice does not affect the VAT rate, providing it is in a reasonable period of time. Moreover, HMRC are using 'light touch' regulations on this and the dealer should be helping you not penalising you.

dave.


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## Mike48 (May 1, 2005)

Who is the motorhome dealer? I have e mailed a similar enquiry to my dealer (Marquis) and I shall let you know the response.


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## blongs (Jan 12, 2009)

When is it due for delivery?

The reason I ask is I saw that on MoneySavingExpert that if it is not due to be delivered for ages you should pay the higher amount.

Q. Is it when you pay or receive goods that counts? The VAT rate's usually determined when you pay or a tax invoice is raised. So pay now but receive goods in 2010, and 15% is charged. Yet there are complications. You could pay the higher rate if a VAT receipt's raised now but you take over 6mths to pay; *or you try to pay now to beat the deadline when there's no chance of it delivered for an age*


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## stephenpug (Sep 18, 2008)

Hi the motorhome is not going to be collected until the 1st week in March so from the end of October when we ordered it till the beginning of March it is less than 5 months (within the 6 month deadline) also i can go and pay the full balance on Tuesday 30th but the dealership will not let me and will not return my phone calls (sorry but i cant name the dealership at the moment) cheers


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## flexable54 (Apr 16, 2009)

*vat*

Hi
Just to add my 2 penny worth to the matter it does not matter how much has been paid or not it is when the goods are invoiced(ie the date on the INVOICE) that dictates the rate of VAT
When I return to work to-morrow all the work we Invoice 
To customers will have tomorrows date & the VAT rate will be 15% are terms of trade are 30 dates from invoice date & alot of those customers will take 60 days to write the cheque.  
When I return to work on the 4th of Jan (1st working day) all the invoices raised will be @ 17.5 % thats THE LAW
So I would suggest you speak to your local VAT Office & Mention your Suppliers intentions to profit from a misunderstanding if you know what I mean :roll:


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## DABurleigh (May 9, 2005)

Is the dealer open for business or is it closed until the New Year?

Dave


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## stephenpug (Sep 18, 2008)

Hi all the phone calls i made were before Christmas I have been trying today but going onto answer phone so hopefully i will get in touch with them Wednesday and pay it all off if it will save me some money i have also e-mailed the vat man asking for conformation or an investigation cheers Steve


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## JohnsCrossMotorHomes (Jul 21, 2007)

Vat is chargeable at the point of sale, i.e INVOICE DATE, if you are willing to pay the invoice in full, your supplier has no reason whatsoever to refuse payment.

He may have internal problems in invoicing a van that is not physically on his stock, but that is his problem, not yours.

You do need to make sure that he does not 'chip' the agreed part exchange allowance when you come to take your van in on the changeover, it has been known to happen as the van will then be some 7 months older than when the deal was struck.

Peter


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## Mike48 (May 1, 2005)

Stephen. Are you sure your vehicle will be delivered in March? I bought one at the NEC in October and was told a March date but already its back to May. 

Remember if you pay in advance and the dealer becomes bankrupt you will probably become an unsecured creditor and lose the lot. This is unlikely I know but its best to understand that such a course is a gamble before committing yourself.

It was my impression from your post that you have early part exchanged your vehicle and also paid a deposit. Will the VAT increase apply to the total cost of the vehicle or the balance outstanding?

Would a way around the problem be for your dealer to invoice you now so you can pay for the vehicle on collection?


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## spongy (Jan 19, 2009)

I would be very cautious about paying in full for a vehicle to be supplied in march. delivery dates are not gospel and dealers do go broke.

spongy


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## stephenpug (Sep 18, 2008)

Hi according to the deleship i will have to pay the vat increase on the whole price of the van not just the £8000 outstanding rgards Steve


gelathae said:


> Stephen. Are you sure your vehicle will be delivered in March? I bought one at the NEC in October and was told a March date but already its back to May.
> 
> Remember if you pay in advance and the dealer becomes bankrupt you will probably become an unsecured creditor and lose the lot. This is unlikely I know but its best to understand that such a course is a gamble before committing yourself.
> 
> ...


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## ob1 (Sep 25, 2007)

If your dealer gets it 'wrong' you can still go back to him for a refund of your overpayment at a later date as it's the Inland Revenues money he is dealing with and not his own. He will in turn request the refund from the IR in the normal course of business. From past experience the IR will even back you if necessary.


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## flexable54 (Apr 16, 2009)

*VAT INCREASE*

I dont think you understand The date of the invoice dictates the rate of VAT being charged I.E. Any invoice raised & Dated the 31/12/09 or Earlier will have a 15 % VAT Charge Any Invoice raised after that date will be 17.5 % 
It is not a matter for the Inland Revenue as someone else has suggested
It is Customs & Excise that control VAT :idea: 
As I said if the terms your dealer has sold you the m/H are a Deposit of X amount & the balance within 30 days of delivery then that is what it is because that is a Contract between you the buyer & him the Supplier it would make no difference if he could not supply the M/H until JULY 2010 if the INVOICE was dated October 2009 & The deposit paid & the VAT RATE shown on the Invoice I.E. 15 % then THAT IS WHAT IT IS 
:lol:


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## Stanner (Aug 17, 2006)

*Re: VAT INCREASE*



flexable54 said:


> I dont think you understand The date of the invoice dictates the rate of VAT being charged I.E. Any invoice raised & Dated the 31/12/09 or Earlier will have a 15 % VAT Charge Any Invoice raised after that date will be 17.5 %
> It is not a matter for the Inland Revenue as someone else has suggested
> It is Customs & Excise that control VAT :idea:
> As I said if the terms your dealer has sold you the m/H are a Deposit of X amount & the balance within 30 days of delivery then that is what it is because that is a Contract between you the buyer & him the Supplier it would make no difference if he could not supply the M/H until JULY 2010 if the INVOICE was dated October 2009 & The deposit paid & the VAT RATE shown on the Invoice I.E. 15 % then THAT IS WHAT IT IS
> :lol:


IR & C&E are long gone it's all the same Dept now

HMRC
Her Majesty's Revenue & Customs.


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## bognormike (May 10, 2005)

Zebedee said:


> As I understand it, being in a similar position, it all hinges on exactly when the makers of the new van invoice the dealer.
> 
> If the dealer is invoiced before 31st Dec, and you also pay him in full before that date, you will pay only 15% VAT.
> 
> ...


A red herring I think, Dave. :roll: It doesn't matter when the dealer has his invoice from his supplier - he will claim it back whther it's 15% or 17.5%.

The seller CAN treat the money received as a deposit, and do a sale at the rate in force when the goods are delivered - in MArch at 17.5%. BUT as explained in the HMRC link from DAB thi swould be more appropriated for those selling to VAT registered customers who can claim it back. For retail sales such as this the retiler can treat all money received as a sale in December (or before ) at 15%, so if you pay all of it beofre 31st December it can all be rated at 15%. I am doing exactly this with the conservatory that we are having done on our house in JAnuary - We paid 25% on order, and will pay the balance tomorrow (!) to get it charged at 15%.

I would point out to the dealers that they have the option to treat the money received as a sale at 15%, and as it's to their customers' benefit for them to do so, I can't see why there's a problem.  Unless that is they are trying it on to get a better margin :x


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## Rosbotham (May 4, 2008)

My view would be that the dealer is (probably sensibly) covering themselves against delayed delivery.

The pertinent material is at the top of page 42 of the HMRC link provided above. In essence, where there's a deposit taken, the transaction is taken as having two tax points...one for the deposit and one for the balance. The default is for the prevailing VAT rate to apply for each (hence 15% for deposit, 17.5% for balance). However, the supplier can choose to go for a simplified approach of applying 17.5% against the lot.

One of the reasons for doing this is if anti-forestalling legislation applies, and in Section 11 one of the reasons for this applying is where there's more than a 6 month lag between invoice and payment in full. Given you purchased in October and are due for delivery in March, that's 5 months so any delay puts the transaction squarely within the bounds of that legislation.

I'm not a tax expert, just reading with interest because I'm currently purchasing a car and my dealer has taken the same approach as yours, albeit with a slightly less painful deposit of £500.

You could pay in full before 1st Jan but (IMHO) it's insanity because you lose all leverage against the dealer for timely delivery.


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## DTPCHEMICALS (Jul 24, 2006)

I can`t see much of a problem.
Simply ask for a pro forma invoice dated in 2009.

Most of my customers take 60 - 90 days to pay.

VAT is charged at the date of issue.

Dealer claime VAT back at whatever rate he is charged.

Customer relations ring a bell

Dave p


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## stephenpug (Sep 18, 2008)

Bad news I have been in touch with the VAT man and he said it is up to the dealer as to how much to charge 15% or 17.5% he cannot get involved the name of the dealership is Marquis Motorhomes and they wont budge and are insisting on the 17.5% (an extra £800) so that is our holiday in France cancelled Happy new Year to everyone.


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## RossMcC (Mar 30, 2009)

Stephen, I'm sure the dealer is wrong on this one. 

If you pay a deposit before 31 December then 15% VAT applies. The dealer has the option to charge 17.5% on the whole transaction, but why on earth would they? 
The anti forestalling legislation covers various scenarios, but the only relevant one would be pre invoicing or pre payment for goods. Pre payment would not be caught as you are not connected (I presume!) with the dealer and the dealer aren't financing the prepayment (again presumed).

Pre invoicing would only stop them raising an invoice for the balance that wasn't going to be payable for 6 months, and wouldn't affect the deposit already paid.

So, in summary, Marquis have no need to charge you 17.5% on the full deal, only on the balance outstanding at 31 December.


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## JohnsCrossMotorHomes (Jul 21, 2007)

Two interesting points about this topic:

1. Our Vat Office have advised us that if the item supplied is paid for and invoiced before January 1st, the the current rate at invoice date will apply.

There is a grey area in that it should be the suppliers normal practice to invoice in this way. i.e before delivery otherwise it could be construed as tax evasion.

2. When we take an order the total *agreed* price of the item is shown on the order, it is normal practice to show a Vat inclusive total price of the item, the only additions might be accessories etc.

In our case should the item go up in price either by a price or tax increase we would absorb those increases and honour the original price as shown on our order form. In the case of a rare tax reduction we would reduce the price accordingly.

I would suggest you peruse your order form and see what conditions are applicable!

Peter


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## Mike48 (May 1, 2005)

RossMcC wrote "So, in summary, Marquis have no need to charge you 17.5% on the full deal, only on the balance outstanding at 31 December."

Is this correct? I must admit to being confused. But as I understand it, VAT is charged on the full price of the vehicle and not the value of the deal. Deposits and part exchange do not count do they? 

What I mean is that if a vehicle costs £50K and a deposit including part exchange amounts to £25K leaving £25K outstanding would not VAT be chargeable on the full £50K?


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## stephenpug (Sep 18, 2008)

even though i have paid in cash and part ex everything but £8000 i still have to pay the extra 2.5% vat on the whole price of the motorhome it is marquis motorhomes choice to charge it they don't have to according to the vat man but they wont budge on it and the vat man cant intervene = my loss ="gelathae"]RossMcC wrote "So, in summary, Marquis have no need to charge you 17.5% on the full deal, only on the balance outstanding at 31 December."

Is this correct? I must admit to being confused. But as I understand it, VAT is charged on the full price of the vehicle and not the value of the deal. Deposits and part exchange do not count do they?

What I mean is that if a vehicle costs £50K and a deposit including part exchange amounts to £25K leaving £25K outstanding would not VAT be chargeable on the full £50K?[/quote]


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## Koppersbeat (May 10, 2005)

Steve,
Yes VAT is charged on the whole price of the vehicle not just the deal price that you end up paying.
We had a bit of conflicting advice from the VAT man on the helpline before we imported from France earlier this month.Our new van ordered in September we were told in October would not be available until mid January.The dealer said he could raise a VAT free invoice in early December and he would also have the chassis number and we could pay the balance of the part-ex deal then.I told all this to the HMRC helpline
and they insisted that if it did not arrive in UK until January we would be charged 17.5% I then did an online query which they took 2 weeks to answer and they merely quoted the text from the website ie if you pay in December it would be 15%
I was not convinced so phoned the export director of Rapido in Mayenne France,Monsieur Bonnin.and told him our plight that for the sake of 2 weeks we could be charged an extra 1,500 euros.
He said to leave it with him.
Four days later he rang me to say that the Rapido 903 woud be ready for collection in the 1st week of December!!
They are an excellent manafacturer to deal with and the dealer in Rennes pulled out all the stops to get it prepared to our spec on time.
Helen.


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## RossMcC (Mar 30, 2009)

Just to clarify the point about the deposit, the Revenue have issued a guide to the rate change, available here:

http://tinyurl.com/yd63e5w

At section 2.6 it says:

* 2.6 How do I deal with deposits or pre-payments? *
The normal rule is that you should account for VAT on a deposit or pre-payment at the rate in force when you receive it. If you receive a deposit before 1 January 2010 for goods or services that you will supply on or after that date the 15% rate of VAT will apply to the deposit and 17.5% will apply to the balance. You do have the option to charge 17.5% on the deposit which may simplify matters if your customer can recover the VAT (see section 3).

However, I was having a think about this last night, and I think the trade in will cause a problem, in that although you may have agreed a trade in price, and presumably this will be a large part of the deposit, the trade in wont actually take place until the new van is delivered, i.e. after 1 Jan 2010, and so that part of the payment will be liable at 17.5%.

The dealer could get round it by invoicing the full amount now, but unless he took physical delivery of the trade in, I'm not sure he'd be too keen to do so. He'd also have to be sure delivery was going to take place within 6 months from the invoice date otherwise he'd be caught under the anti avoidance rules.

Hope this helps.


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## DTPCHEMICALS (Jul 24, 2006)

Ask Marquis for a higher p/ex on your van ie Equivalent to the new vat rate when the deal will be concluded.

DAve p

edit.

I sincerely hope that you have no warranty or pdi issues, or you could make life hell for this dealer. Do not pay the balance until you have inspected your new van. Dealers like to finalise the sale before handing over the keys.Take a notebook and look into every nook and cranny. Any problems make a noise. Its your hard earned money after all.

Best of luck.
dave p


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## Mike48 (May 1, 2005)

RossMcC. The original poster has handed over his part exchange prior to receiving his new van. The link you provided makes it perfectly clear that you pay VAT at 17.5% only on the outstanding balance so that should help the original poster considerably.


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## Stanner (Aug 17, 2006)

> You do have the option to charge 17.5% on the deposit which may simplify matters if your customer can recover the VAT (see section 3).


Surely it's the above bit that matters and although it may simplify matters for Marquis, it doesn't for the OP.


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## Rosbotham (May 4, 2008)

gelathae said:


> RossMcC. The original poster has handed over his part exchange prior to receiving his new van. The link you provided makes it perfectly clear that you pay VAT at 17.5% only on the outstanding balance so that should help the original poster considerably.


Has he? I've re-read the whole thread and can't find anything that confirms this one way or the other. The impression I'd got is that Stephen's paid his deposit and will hand over his part-ex when he gets his new van. However I could be misinterpreting.

If my interpretation is correct, then defacto he's paid a cash deposit, and will be paying a balance part by cash, part by the value of the part-ex. The dealer _could_ choose to apply 15% VAT against the deposit then 17.5% against the remainder, but they're equally allowed to just apply 17.5% against the lot. It's the taxman that'll pocket the extra, not Marquis...they'll gain only by ease of administration.

Stanner subsequently quotes that HRMC suggests the blanket 17.5% approach be used if the customer can recover VAT...but other material in the document makes it clear that there could be many other reasons for taking the "easier" approach - for example, given the 5 month lag between order and delivery, being squeeky clean wrt the tax avoidance measures.

I do sympathise with Stephen because I'm in a similar position with my own new car, but ultimately it's something that should have been factored into the negotiation with Marquis in the first place...the reversion of the VAT rate back to 17.5% isn't a surprise.


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## coppo (May 27, 2009)

Yes Rothbotham, especially when a lot of dealers have been using the 15% as a means of buying now before the increase.

I wonder if the Marquis salesmen were saying to potential customers a few months ago, if you but now you'll be saving a few quid. You bet they were.

Very naughty practise if you ask me.

Paul.


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## JohnsCrossMotorHomes (Jul 21, 2007)

coppo said:


> Yes Rothbotham, especially when a lot of dealers have been using the 15% as a means of buying now before the increase.
> Paul.


If the Sales order form states the total price of the van, that is the contract.

Unless in the small print there is a clause saying otherwise.

Peter


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## coppo (May 27, 2009)

Agree Peter
But salesman have been saying the total price of the van stated on the contract will go up if you wait while 2010, hence the saving.

Paul.


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## stephenpug (Sep 18, 2008)

Hi Marquis motorhomes had my old motorhome (well 2007 reg) the 15/11/09 and also my cash deposit was paid just after the October show at the NEC so all i owe is £8000 they sold my old van within 2 weeks of getting it from me, but on the original invoice it does state in small print liable to vat increase but i am being charged on the cost of the whole new motorhome not on the £8000 outstanding balance but like i said marquis motorhomes wont budge which is a real shame as i like to change my motorhome every 2 years so i will not use this dealership again have a good new year everyone regards Steve


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## Rosbotham (May 4, 2008)

Sorry for the misinterpreting what you'd said.

To be honest, I'd be as upset about "giving" them 5 months' interest on (deposit)+(value of PX) as I would about paying a couple of extra percent extra VAT...it's probably worth nigh on as much.

You'll have to forgive me, because I've not yet PXd a van so maybe this is the normal approach. Personally, I'd not let them have the PX van until the new one was sat in front of me...or if I did they'd could go & whistle for a cash deposit.

Is handing the PX *and *deposit months in advance of delivery usual industry practise?


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## stephenpug (Sep 18, 2008)

To be honest i don't know about normal industry policy but the salesman who i must say was excellent asked us for our motorhome asap (i think he may have had a buyer lined up).But hopefully people will learn from our mistakes.regards Steve


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## JohnsCrossMotorHomes (Jul 21, 2007)

Rosbotham said:


> Is handing the PX *and *deposit months in advance of delivery usual industry practise?


The p/x value depends on when the van goes into the dealer, if it is this month then thats the value, if its in six months time and one never knows what mileage it has done since and what state it is in, then it is difficult to value exactly in all fairness.

In Stephen's case, having paid a deposit, and handed over his van, I would honour the original deal as struck and absorb the VAT increase.

Peter


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## TR5 (Jun 6, 2007)

Surely the issue here is in the paperwork already supplied.

If you have been given a VAT invoice for the money and goods deposited with Marquis to date, then this is when the VAT applies on that sum.

However, if Marquis have given you some form of a receipt only on the order form for the deposit and goods supplied, which may state "this is not a vat invoice", then they have not accounted for any vat to date, and a sales invoice for the full amount, including the vat at the prevailing rate, will follow in due course, with you owing the balance.

If the latter is the case, then you have almost paid Marquis in full (excluding the vat) for this transaction, and most of what you still owe will be the vat element.

The issue with you already having supplied your trade-in to them, and Marquis already having sold the vehicle on (at 15% vat) is a complex one, and I would question the legality of charging you 17.5% on the PX allowed on this vehicle. However, you would need some professional advice on this one, and I cannot provide that!

Having known that vat was likely to increase back to 17.5% from 1st Jan 2010, and knowing that your vehicle was not due for delivery until March 2010, the vat element and how it would be dealt with should have been included within discussions with Marquis, at the time of the order. You probably would have had some bargaining power at that time, but once they have your order (and money) ..........


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## Mike48 (May 1, 2005)

It seems to me that there are 2 issues here:

*1. How deposits are treated for VAT purposes *

There is an earlier post on here drawing attention to the HMRC VAT guidance which states that deposits received prior to 1 January should be subject to 15% VAT and its only the balance that is liable for VAT at 17.5%. As far as I can tell there is no reference to a VAT invoice in that guidance so I presume that as long it can be demonstrated that a deposit has been made then that should be sufficient proof to enable the matter to be taken up with HMRC if Marquis fail to change their stance.

*2. If a contract had been entered into prior to 1 January what level of VAT should apply?*

The essential point is that the original poster has documentation from Marquis to say that the higher rate of VAT will apply when the vehicle is handed over or words to that effect. Marquis also seem to be saying that they are unable to raise an invoice until they have physical possession of the vehicle from the manufacturer. There seems to be a mixture of views on this point but I believe it has been stated on here or elsewhere that if the Company could issue an invoice the vehicle would have to be paid for prior to 1 January. This date has now passed.

In any event I suspect Marquis are correct because there is a reference in one of Peter's earlier posts that HMRC would only accept such action if it constituted normal practice and was not a measure introduced purely to avoid the correct VAT amount being paid.

*Summary*

So, in summary the best approach would be for the poster to draw Marquis's attention in writing to the HMRC guidance as it relates to deposits under 1 above and take it from there. I presume if Marquis fail to come up with a satisfactory explanation the matter can be raised in writing with HMRC at a later date.


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## TR5 (Jun 6, 2007)

http://www.hmrc.gov.uk/vat/managing/charging/vat-invoices.htm#9

As stated before, vat liability hinges on when a vat invoice is produced.

As I understand it, a vat invoice MUST be produced within 30 days of a payment or part payment for goods/services, if requested by the customer who is not registered for vat, or without request by a vat registered customer, unless a pro-forma invoice is raised, and states "this is not a vat invoice". This acts as a receipt for the deposit, and in this case, all the vat content will be included within the VAT invoice raised at a later date.

Also as stated before, knowing that there was a forthcoming change in vat rate, this should have been discussed as part of the negociations for the goods, at the time of order. It is too late now!


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## Mike48 (May 1, 2005)

I based my comments on this document here:

http://tinyurl.com/yd63e5w

In particular this paragraph here:

*2.6 How do I deal with deposits or pre-payments?*
_
The normal rule is that you should account for VAT on a deposit or pre-payment at the rate in force when you receive it. If you receive a deposit before 1 January 2010 for goods or services that you will supply on or after that date the 15% rate of VAT will apply to the deposit and 17.5% will apply to the balance. You do have the option to charge 17.5% on the deposit which may simplify matters if your customer can recover the VAT (see section 3)._

There are so many differing opinions and DTP's link is a new dimension but it seems to be viewed from the trader's viewpoint rather than the customer's. I have read something somewhere saying that mistakes made can be rectified at a later date but that might be another red herring.

I hope the original poster is not as confused as I am.


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## stephenpug (Sep 18, 2008)

Thanks I am totaly confused but I will just pay the extra vat and not buy another motorhome of marquis motorhomes again, there loss . cheers Steve


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## RossMcC (Mar 30, 2009)

Steve, Don't give up so easily. 
The document I linked to earlier is an official HMRC document. Take it along to Marquis and show it to them. They are in the wrong, pure and simple.


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## Rosbotham (May 4, 2008)

I really struggle to see how you reach that conclusion.

On reading the whole document, it seems clear to me that the default is to charge the applicable VAT rate at the time of each stage payment, but as far as HRMC is concerned the trader is at liberty to apply 17.5% blanket if that suits them. The example of it being useful if the VAT is to be reclaimed is given, but it doesn't say that this is the only situation where it applies. So it's clearly arguable that Marquis are morally wrong, but they're clearly not legally so.

I know on car purchases, Fiat for example were taking the same position for deposits taken in December...I couldn't get worked up because my deposit was only £500 so the odd 2.2% was by-the-by.

Incidentally, as an aside, I was reading that because quite a few Fiat 500s have had delayed delivery, on any orders taken before mid-Sept but not fulfilled by end 2009 Fiat have actually absorbed the extra VAT on the whole lot. Perhaps they do have a heart after all.


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## JohnsCrossMotorHomes (Jul 21, 2007)

In my book its is pure bloody mindedness, as I said before if it was me I would either take the money and thank you very much or just absorb it.

A deal is a deal. Any one like to put money on it being mentioned that if delivery was after Jan 1st, new rate would apply?

Why pay poxy Brown and his cronies any more than you have to.

Peter


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## erneboy (Feb 8, 2007)

Peter said, "If the Sales order form states the total price of the van, that is the contract.

Unless in the small print there is a clause saying otherwise."

Having been in business since before VAT began I agree entirely with Peter and I can add that if push came to shove the VAT man (especially one lacking experience) would be just as confused as everyone else. VAT is accounted for on each payment when it is invoiced, after that it is history and only the VAT on the outstanding amount can change but if you agreed a total price that is the dealers problem. It need not have been a problem for them as they could have raised an invoice at any time and stated that payment was due on delivery.

So if the remaining sum was invoiced before the increase came in to effect then the old, lower rate is the one which applies to the balance. The delivery date is irrelevant. If it was not invoiced before the VAT rate rose the dealer has made a book keeping error and you should not pay for that. If you get a different answer keep challenging it. 

VAT is fairly unimportant to businesses as we pay it and get it back, we collect it and pass it on. It is a complete pain and we administer it free, but it costs us almost nothing. The VAT man deals with busines queries most of the time and the default position will be to tell you to pay it besause most of the people they deal with get it back anyway.

Keep going till you get the right answer, Alan.


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## DABurleigh (May 9, 2005)

I'd like to know Marquis' response to sections 2.6 and 3.3 of the link I gave in the first response on this thread. Why would they be against a payment up front? Did they really think you could recover the VAT? 

Dave


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## DTPCHEMICALS (Jul 24, 2006)

I think Marquis are going to lose more than the £800 that they are taking here.
I would issue a proforma invoice take your payment with pleasure.
They are going to reclaim all the vat anyway so it is not going to cost them anything.

Dave p


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## cater_racer (May 1, 2005)

Marquis are not adverse to little creative accounting to minimise VAT liability when it suits them. When I traded in my mclouis for the "new", ahem, "Nearly new", but sold "as New" Augusta. They initially offered me a value for the McLouis of 12,000. But when the invoice was made out they discounted the Augusta by a further £5,000 and reduced the trade in by the same amount.

I picked up on it immediatley, "oh it reduces our VAT liability" came the reply..................................


Ex Marquis customer.


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## Stanner (Aug 17, 2006)

cater_racer said:


> Marquis are not adverse to little creative accounting to minimise VAT liability when it suits them. When I traded in my mclouis for the "new", ahem, "Nearly new", but sold "as New" Augusta. They initially offered me a value for the McLouis of 12,000. But when the invoice was made out they discounted the Augusta by a further £5,000 and reduced the trade in by the same amount.
> 
> I picked up on it immediatley, "oh it reduces our VAT liability" came the reply..................................
> 
> Ex Marquis customer.


Surely that is VAT fraud and needs to be reported to HMRC?


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## cater_racer (May 1, 2005)

Stanner said:


> cater_racer said:
> 
> 
> > Marquis are not adverse to little creative accounting to minimise VAT liability when it suits them. When I traded in my mclouis for the "new", ahem, "Nearly new", but sold "as New" Augusta. They initially offered me a value for the McLouis of 12,000. But when the invoice was made out they discounted the Augusta by a further £5,000 and reduced the trade in by the same amount.
> ...


Very probably, but I was much more concerned at the time about the fraud being inacted against me, ie passing off, a six month old motorhome as new.


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## Mike48 (May 1, 2005)

Stanner said:


> cater_racer said:
> 
> 
> > Marquis are not adverse to little creative accounting to minimise VAT liability when it suits them. When I traded in my mclouis for the "new", ahem, "Nearly new", but sold "as New" Augusta. They initially offered me a value for the McLouis of 12,000. But when the invoice was made out they discounted the Augusta by a further £5,000 and reduced the trade in by the same amount.
> ...


Can somebody explain why this is VAT fraud? If VAT is recorded by the Motorhome dealer on the value of the vehicle from the factory and then receives VAT on the price received from the customer how is this a fraudulent transaction.

I'm interested because I have done a similar deal with Marquis and am trying to get my head around the posts on here about the correct amount of VAT to pay?

Thanks.


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## Stanner (Aug 17, 2006)

gelathae said:


> Stanner said:
> 
> 
> > cater_racer said:
> ...


I don't know how it reduces their liability, BUT surely if they manipulate the proportion of trade in value to discounted price with _"the intention of reducing the amount of VAT paid"_ that is fraud.


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## erneboy (Feb 8, 2007)

I have seen dealers do this too, it seems to me that it is a fiddle. Can any one explain it, Alan.


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## Losos (Oct 28, 2009)

FWIW I am also in this position, my dealer told me that they can not issue an invoice until they have registered the vehicle and they can not do that until they have the VIN and all the other stuff so my invoice will be dated 1st. March and I will be paying 17.5%

This 'rule' *may only apply to my dealer*, other dealers may have a different internal rule, but whichever way you look at *it it is the date of the invoice which detemines the VAT payable.*

Also no way do I wish to support the VAT people but while many firms do backdate invoices for the purposes of 'boosting' sales figures, to do so with the VAT people is *very dodgy*. How many people here know that HM Customs & Excise (Who claim VAT) *actually have more powers than the Police, Inland revenue, or anyone else in Britain*, if you ever read about what they got up to in the 17th. & 18th. century you'll treat them with caution.


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## dovtrams (Aug 18, 2009)

Losos said:


> FWIW I am also in this position, my dealer told me that they can not issue an invoice until they have registered the vehicle and they can not do that until they have the VIN and all the other stuff so my invoice will be dated 1st. March and I will be paying 17.5%
> 
> This 'rule' *may only apply to my dealer*, other dealers may have a different internal rule, but whichever way you look at *it it is the date of the invoice which detemines the VAT payable.*
> 
> Also no way do I wish to support the VAT people but while many firms do backdate invoices for the purposes of 'boosting' sales figures, to do so with the VAT people is *very dodgy*. *How many people here know that HM Customs & Excise (Who claim VAT) actually have more powers than the Police, Inland revenue, or anyone else in Britain, if you ever read about what they got up to in the 17th. & 18th. century you'll treat them with caution.*




I suspect many well informed people on this forum know that HMRC have greater powers than many others, such as the police! There is no such body as Customs&Excise or Inland Revenue, I wonder how many people know that?

dave


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## Rosbotham (May 4, 2008)

erneboy said:


> I have seen dealers do this too, it seems to me that it is a fiddle. Can any one explain it, Alan.


Peter will explain it better. However, this is the best explanation I can come up with.

Consider Case A and Case B;

A: Customer is a cash buyer and negotiates a £4k discount on new van.

B : Customer has part-ex, pays list price for new MH and is offered a flattering part-ex on their existing van.

Conceivably the dealer margin could be identical on both. However VAT will be payable on the value of the asset sold. If Case B was put through with the "flattering" PX value, then it would have a higher VAT liability than Case A because it'd be at list price. If it was put through at a more realistic value of the PX, then smaller transaction value, lower VAT. If the difference between the PX value stated to customer and real value of PX was £4k...ie dealer margin is the same...using the lower value on the invoice makes VAT payable on A and B the same.

Of course, the value of the PX is a bit of an imponderable so I'm sure some dealers stretch it, but I'm equally sure HMRC are all over them like a rash to make sure they don't push it too far.

Haven't ever PX'd a motorhome, but when PXing a car I don't think the value on the invoice has ever been the actual PX figure discussed with the dealer.

Incidentally back to the original, Marquis are not gaining from putting the whole lot through at 17.5% other than by ease of administration / administrative laziness (delete as you see fit)...the taxman will get the extra 2.2%, not Marquis.


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## JohnsCrossMotorHomes (Jul 21, 2007)

Basically you have got it in one!

It is common practice to write back the value of p/x's in the motor trade, whatever we do the leeches at the Treasury always get their cut of the *gross profit*, NOT THE NETT after recon costs.

We could actually lose money on the p/x sale after costs and they would still demand 17.5% of the gross.

Peter


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## stephenpug (Sep 18, 2008)

thanks to all i am trying to pursue it and pay only the 15% i think that marquis motorhomes aren't to blame for being cautious it is the VAT not being very clear and creating a lot of grey areas


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## joedenise (Jul 20, 2007)

May not be Marquis but if you have a receipt for, say, £5K less than you paid for it, trying getting your money back if there are problems with the van you bought.

Joe


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## stephenpug (Sep 18, 2008)

Been in touch with marquis motorhomes today they are waiting for clarification from the vat man


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## stephenpug (Sep 18, 2008)

had a reply from Marquis Motorhomes they still wont budge and insist on the full vat even though it is their prerogative as to which rate to charge i don't understand them where does customer relations and customer interest come in


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## RossMcC (Mar 30, 2009)

stephenpug said:


> had a reply from Marquis Motorhomes they still wont budge and insist on the full vat even though it is their prerogative as to which rate to charge i don't understand them where does customer relations and customer interest come in


That is so annoying, it's not even that Marquis gain anything, the extra VAT just goes straight to the Treasury.


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## stephenpug (Sep 18, 2008)

That is so annoying, it's not even that Marquis gain anything, the extra VAT just goes straight to the Treasury.[/quote]
I think they are just being bloody minded which is a real pity as I wont deal with them again and how many people going to buy a new motorhome at the NEC in February will be thinking about customer relations and walk past the Marquis Motorhome salesmen they are being FOOLS to themselves !!


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## teemyob (Nov 22, 2005)

*VAT*

I had to raise my 15% invoices by 31st December 2009. I might not get paid for these invoices for 30-60 days. However, the 15% rate is valid until paid. It is the date raised that matters in my case.

Would point out that the same applies to those who do Cash Accounting VAT

Makes one wonder!


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## Rosbotham (May 4, 2008)

A postscript to this, solely because I feel the need to rant somewhere.

As I mentioned earlier in the thread, I was purchasing a car, and was charged 17.5% on the lot, including the deposit paid when the VAT rate was 15%. I wasn't as concerned as the OP, because my deposit was only £500 so I couldn't get worked up about the 2.5% difference on that.

Well I picked my car up today. Despite already having factored the VAT rise into the original price, the b8st8rds at Fiat did their best to hike the price by another 2.5%, claiming the original price only had 15% VAT on it. In all, I was there for 90 minutes, a stand-off because they'd already incorporated 1.175/1.15 x the price at time of ordering, and were now doing their best to repeat the exercise to get _another_ £300. I was counting back from 100 and was down to 20, zero being the moment for "f*ck off, you can keep your car & I'll go to the county court via Trading Standards to get my deposit back" when they finally conceded their error.

My little Fiat 500C is just fantastic, though 

Paul


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## DABurleigh (May 9, 2005)

Nice, isn't it? Got over 30000 miles on my Fiat 500 now.


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## stephenpug (Sep 18, 2008)

I have noticed MMM magazine are stating that if you purchase your

new motorhome from the NEC October show you will beat the expected VAT rise but from my experience with Marquis motorhomes when we bought ours last year you wont get away with it and will have to pay the extra 2,5% on the whole purchase so make sure the dealership will bear the cost of any VAT increase or you will be in for an expensive surprise in the new year :evil: :evil:


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## RossMcC (Mar 30, 2009)

I was thinking of the way Marquis treated you over the last VAT increase, and had a look on their web site to see what they were saying about the next increase - would you believe they have a scrolling banner along the top reading:

"Order your new motorhome/caravan from us TODAY & we will guarantee to price protect your purchase against the impending VAT increase"

Maybe they've realised they were wrong before, but I don't suppose it will make you feel any better.


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## stephenpug (Sep 18, 2008)

RossMcC said:


> I was thinking of the way Marquis treated you over the last VAT increase, and had a look on their web site to see what they were saying about the next increase - would you believe they have a scrolling banner along the top reading:
> 
> "Order your new motorhome/caravan from us TODAY & we will guarantee to price protect your purchase against the impending VAT increase"
> 
> Maybe they've realised they were wrong before, but I don't suppose it will make you feel any better.


I am not saying that I don't trust them but I would ask for that in writing before I parted with my deposit cheers 8O


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## Rosbotham (May 4, 2008)

I'd look on the bright side. When I came to pick up my Fiat 500 (ordered when VAT was 15%, delivered/paid for when VAT was 17.5%) the b&st&rd dealer tried to charge me the extra VAT twice! When they made up the invoice on ordering they factored in the extra VAT payment that would be required. When I came to collect they once again took the (already inflated) invoice price and tried to add an extra couple of % to reflect the new VAT rate. There was an incredible 2hr standoff before they finally admitted the error and I accepted the car. You couldn't make it up.

Paul


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## stephenpug (Sep 18, 2008)

RossMcC said:


> I was thinking of the way Marquis treated you over the last VAT increase, and had a look on their web site to see what they were saying about the next increase - would you believe they have a scrolling banner along the top reading:
> 
> "Order your new motorhome/caravan from us TODAY & we will guarantee to price protect your purchase against the impending VAT increase"
> 
> Maybe they've realised they were wrong before, but I don't suppose it will make you feel any better.


hopefully all my moaning and winging has helped anybody buying of them in the nec show so some good has come out of it


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## JohnsCrossMotorHomes (Jul 21, 2007)

Once again dealers are in the firing line, whatever they do according to HM Revenue they will be wrong and accused of TAX EVASION unless for the last few years they have (a) INVOICED the deposit at the time of payment and included VAT in the amount paid,
or they invoice the whole amount payable.

If they have not been doing this then they are liable to be in the @@@@ !

We have never invoiced deposits and I cannot see any other dealer doing it in the past.

CATCH 22 ! as usual with the Revenue'

Peter
---------------------------------------------------------------------------

_October 6, 2010

In advance of the VAT increase which takes effect from 4 January 2011, members may be looking to stimulate demand once again by launching another "beat the VAT campaign" as a way of tempting consumers to order new products early.

To assist members, and particularly in advance of the "International Caravan & Motorhome 2010 show at the NEC 12-17th October, the NCC has updated the attached guidance in advance of the next VAT change which is intended to summarise the HMRC VAT Guidance Notes and apply them to industry practice. Click here for a copy.

The Change to 20% VAT on 4 January 2011
Guidance Notes for NCC Member Companies
These notes are a summary of the guidance previously issued by HMRC as we believe they apply to manufacturers and dealers. The notes are for guidance only. The NCC will not be held responsible nor liable for any errors or misunderstandings contained in these notes. If you are in any doubt about a transaction or how to deal with the change from 17.5% to 20% VAT, you must consult your own advisor.
HEALTH WARNING - The purpose of the anti-forestalling legislation is an attempt to prevent businesses from benefitting from early VAT invoicing where it does not follow normal commercial practice.
PLAY IT SAFE
If a customer pays in full for a caravan/motorhome prior to 4 January 2011 and takes delivery after that date the 17.5% rate will apply unless condition 1, 2 or 3 below applies in which case the supplementary charge becomes due.
THE LAW
The normal rule is that you should account for VAT at the rate in force when you issue a VAT invoice or receive a payment in advance of a supply. So payments received or VAT invoices issued before 4 January 2011 for goods or services to be provided on or after that date will be liable to VAT at 17.5%.
*However, anti-forestalling legislation has been introduced to limit the extent to which the 17.5% rate can apply to payments made or VAT invoices issued before 4 January 2011 for certain supplies of goods or services provided on or after that date when the standard rate increases to 20%.*
The legislation will only apply where the customer is unable to recover the VAT on the supply (for example a private individual or a partly exempt business) and at least one of the following conditions is met:
1.
the supplier and the customer are connected with each other at any time between the date that the invoice is issued, or payment received, and 4 January 2011; or
2.
the supplier or a person connected to the supplier finances a prepayment by the customer; or
3.
the supplier raises a VAT invoice where payment is not due in full within six months of the invoice date; or
4.
the consideration for the supply (and any related supply of goods or services1) amounts to more than £100,000.
1 This covers the situation where a supplier (or business associated with the supplier) makes a supply to a customer (or business associated with the customer) with a value greater than £100,000, but attempts to split the payment so that each payment made is below the £100,000.
National Caravan Council, Catherine House, Victoria Road, Aldershot, Hampshire GU11 1SS 2
However, the supplementary charge will not apply where the supplier can show that the pre-payment is made or advance VAT invoice raised between unconnected parties in accordance with normal commercial practice when no VAT rate increase is expected.
If a customer pays in full for a caravan/motorhome prior to 4 January 2011 and takes delivery on or after that date the 17.5% rate will apply unless condition 1, 2 or 3 above applies in which case the supplementary charge becomes due, but only where the customer is unable to recover the VAT.
If a customer pays a deposit prior to 4 January 2011 and takes delivery and pays the balance on or after that date the 17.5% rate will apply to the deposit and 20% to the balance. Again this is subject to conditions 1, 2 or 3 in relation to the deposit, and only then if the customer is unable to recover the VAT.
If a VAT invoice is issued to the customer before 4 January 2011 for the full value of a caravan/motorhome to be delivered on or after that date then, provided the amount shown is payable in full within 6 months of the invoice date, the 17.5% rate will apply. Again this is subject to conditions 1, 2 or 3, if the customer is unable to recover the VAT. The VAT amount shown on the invoice will have to be accounted for in the return covering the period in which the invoice is issued and not the date that payment is due.
There is no requirement for the caravan/motorhome to be in existence at the time that the VAT invoice issued or the payment is received.
DEALERS BEWARE!
Usual business practice is for a non-refundable deposit to be paid by the customer when an order is placed and, when the caravan/motorhome is later delivered to the customer, for an invoice to be issued by the dealer to the customer for the final amount.
The rate of VAT to be charged on a supply of goods, and the timing of the VAT charge, is determined by reference to a "tax point". Normally, a tax point arises when the goods in question are made available but an earlier tax point (referred to as an "actual" tax point) can be created by the issue of a VAT invoice or receipt by the supplier of payment before an invoice is issued or the goods are made available.
Dealers may be considering changing their practice by issuing invoices to their customers for caravan/motorhome orders placed on or before 3 January 2011.
*ANY DEALER CHANGING THEIR BUSINESS PRACTICE (CREATING AN EARLIER TAX POINT) COULD WELL BE CHALLENGED ON THE GROUNDS OF TAX AVOIDANCE!The Change to 20% VAT on 4 January 2011*
Guidance Notes for NCC Member Companies
These notes are a summary of the guidance previously issued by HMRC as we believe they apply to manufacturers and dealers. The notes are for guidance only. The NCC will not be held responsible nor liable for any errors or misunderstandings contained in these notes. If you are in any doubt about a transaction or how to deal with the change from 17.5% to 20% VAT, you must consult your own advisor.
HEALTH WARNING - The purpose of the anti-forestalling legislation is an attempt to prevent businesses from benefitting from early VAT invoicing where it does not follow normal commercial practice.
PLAY IT SAFE
If a customer pays in full for a caravan/motorhome prior to 4 January 2011 and takes delivery after that date the 17.5% rate will apply unless condition 1, 2 or 3 below applies in which case the supplementary charge becomes due.
THE LAW
The normal rule is that you should account for VAT at the rate in force when you issue a VAT invoice or receive a payment in advance of a supply. So payments received or VAT invoices issued before 4 January 2011 for goods or services to be provided on or after that date will be liable to VAT at 17.5%.
However, anti-forestalling legislation has been introduced to limit the extent to which the 17.5% rate can apply to payments made or VAT invoices issued before 4 January 2011 for certain supplies of goods or services provided on or after that date when the standard rate increases to 20%.
The legislation will only apply where the customer is unable to recover the VAT on the supply (for example a private individual or a partly exempt business) and at least one of the following conditions is met:
1.
the supplier and the customer are connected with each other at any time between the date that the invoice is issued, or payment received, and 4 January 2011; or
2.
the supplier or a person connected to the supplier finances a prepayment by the customer; or
3.
the supplier raises a VAT invoice where payment is not due in full within six months of the invoice date; or
4.
the consideration for the supply (and any related supply of goods or services1) amounts to more than £100,000.
1 This covers the situation where a supplier (or business associated with the supplier) makes a supply to a customer (or business associated with the customer) with a value greater than £100,000, but attempts to split the payment so that each payment made is below the £100,000.
National Caravan Council, Catherine House, Victoria Road, Aldershot, Hampshire GU11 1SS 2
However, the supplementary charge will not apply where the supplier can show that the pre-payment is made or advance VAT invoice raised between unconnected parties in accordance with normal commercial practice when no VAT rate increase is expected.
If a customer pays in full for a caravan/motorhome prior to 4 January 2011 and takes delivery on or after that date the 17.5% rate will apply unless condition 1, 2 or 3 above applies in which case the supplementary charge becomes due, but only where the customer is unable to recover the VAT.
If a customer pays a deposit prior to 4 January 2011 and takes delivery and pays the balance on or after that date the 17.5% rate will apply to the deposit and 20% to the balance. Again this is subject to conditions 1, 2 or 3 in relation to the deposit, and only then if the customer is unable to recover the VAT.
If a VAT invoice is issued to the customer before 4 January 2011 for the full value of a caravan/motorhome to be delivered on or after that date then, provided the amount shown is payable in full within 6 months of the invoice date, the 17.5% rate will apply. Again this is subject to conditions 1, 2 or 3, if the customer is unable to recover the VAT. The VAT amount shown on the invoice will have to be accounted for in the return covering the period in which the invoice is issued and not the date that payment is due.
There is no requirement for the caravan/motorhome to be in existence at the time that the VAT invoice issued or the payment is received.
DEALERS BEWARE!
Usual business practice is for a non-refundable deposit to be paid by the customer when an order is placed and, when the caravan/motorhome is later delivered to the customer, for an invoice to be issued by the dealer to the customer for the final amount.
The rate of VAT to be charged on a supply of goods, and the timing of the VAT charge, is determined by reference to a "tax point". Normally, a tax point arises when the goods in question are made available but an earlier tax point (referred to as an "actual" tax point) can be created by the issue of a VAT invoice or receipt by the supplier of payment before an invoice is issued or the goods are made available.
Dealers may be considering changing their practice by issuing invoices to their customers for caravan/motorhome orders placed on or before 3 January 2011.
*ANY DEALER CHANGING THEIR BUSINESS PRACTICE (CREATING AN EARLIER TAX POINT) COULD WELL BE CHALLENGED ON THE GROUNDS OF TAX AVOIDANCE!*_


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## stephenpug (Sep 18, 2008)

tried all that even tried to pay in full the beginning of december but marquis motorhomes would have non of it so get the price and no increase in VAT IN WRITING buyer be aware :roll:


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## Italia (Apr 19, 2009)

Consulted the Old(er) man on this one, who used to be a Collector in the HM Customs. The "law," not the advice, is quite clear. 

The VAT on Goods (as opposed to Excise Duty) is paid at point and on day of "sale". Thus whatever you pay in deposit is irrelevant. The day you buy/complete the sale is the day on which VAT is charged at the appropriate rate on the total value of the sale regardless of any deposit. 

As pointed out in earlier posts this is outwith the dealers control and they are at best being disingenuous if they suggest otherwise. 
If you have a "Pre VAT Rise" deal then it is them who must take the hit on their profit margin.

Italia


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