Do you pay VAT on second-hand equipment?
If you’re selling second hand equipment you bought previously, then no VAT is charged on the sale. However, VAT will be due on the margin if you sell it at a profit. If you buy brand new equipment from a non-VAT registered supplier (so no VAT is charged on purchase) you’ll need to charge VAT on the sale.
Do you pay tax on second-hand items?
This is due to the fact that in most cases where you sell second hand goods, the amount you receive rarely exceeds the original price you paid for them and as tax is only chargeable on the profits made, no tax would be chargeable.
Do we charge VAT on equipment?
VAT is currently levied at the standard rate of 14% on most supplies and importations, but there is a limited range of goods and services which are either exempt, or which are subject to tax at the zero rate (for example, exports are taxed at 0%).
Are second hand goods exempt from VAT?
VAT will be charged on the selling price, but the VAT registered seller will normally be able to recover input VAT on the purchase price. … The issue for second hand items occurs where there is no VAT to recover on the purchase, because the item is bought from an individual.
What happens if you charge VAT but are not VAT registered?
A penalty is payable by anyone who issues an invoice showing VAT when they are not registered for VAT: paragraph 2, Schedule 41, Finance Act 2008. The penalty can be up to 100% of the VAT shown on the invoice.
Why do you have to pay VAT on second-hand vans?
The second-hand dealer is registered for VAT and only charges you VAT on the profit he is making on the sale under the VAT margin scheme, in which case you will not be provided with a VAT invoice and you cannot reclaim the VAT charged. … In this case you will get a VAT invoice and can reclaim the VAT charged.
Do you have to declare selling personal items?
The only time when you should declare the income is if you plan to sell second hand goods on a regular basis, for example monthly or quarterly , with a view to making a profit. In this instance, HMRC would deem the income as trading activity and expect you to declare it on your tax return.
Are services subject to VAT?
VAT applies to practically all sales of services and imports, as well as to the sale, barter, exchange, or lease of goods or properties (tangible or intangible). The tax is equivalent to a uniform rate of 12%, based on the gross selling price of goods or properties sold, or gross receipts from the sale of services.
Is there VAT on export services?
VAT on exports
VAT is a tax on goods used in the UK and you do not charge VAT if goods are exported from: Great Britain to a destination outside the UK. Northern Ireland to a destination outside the UK and EU .