Hope someone can answer my (hopefully) simple question;
If a vehicle dealer has cars in stock at the point they become registered for VAT and sell them after they are registered, am I right in thinking they would account for VAT on the full profit as a normal sale? The way I'm thinking is that under the normal rules you would've been allowed to claim the VAT on that stock on hand in the first VAT return, and then when it's sold you just charge VAT as usual. Is that right?
I had a client challenge it this morning and it's thrown me off guard now...!
Is the client a second hand car dealer, I presume so as I can't imagine a franchised dealership wouldn't be vat registered from the start. If so you need to account for VAt on the second hand vat scheme in which case you need to account for vat on the profit element. There are a few threads on here about this.
