VAT on UK Purchase of USed Commercial Vehicle

Hi,

I am looking for some advice around the area of purchasing a bus from a UK bus operator.

I am an Irish bus\coach operator. I am setup as a Partnership and I cannot register for VAT.

I would like to source a second hand vehicle (Coach) from the UK.

It has been my understanding that if I purchase in the UK I must pay be the UK VAT to UK government (20%) which is non recoverable and that is the final total price of the vehicle.

I have been advised by my finance company that I will also be liable for Irish VAT @23% on the full UK value (vat incl) which is also non recoverable. My finance company are adamant that this is the case.

So in effect I'm paying VAT twice. Once at 20% to the UK and again at 23% to Revenue.

For Example:
Vehicle is listed in UK for £100,000 + VAT
Purchase Price to me (as Partnership) = £120,000 = €154,755.11
I then have to pay another 23% to Revenue (€35,593.67) bringing total price of the vehicle to
€190,348.78

Can someone clear this up for me please.
Also If the person I was purchasing from was a "coach dealer" would that effect my VAT liability in Ireland?

Regards,
Battered But No Beaten

What does your accountant say.

I think you may be a little confused. As you are in business and you are acquiring in excess of €41,000 worth of goods from an EU country then you have to register for VAT in relation to the bus. So you give them your Irish VAT number and then they will zero rate the supply. You have to account for the 23% Irish Vat. Then you deregister.

http://www.revenue.ie/en/tax/vat/guide/eu-acquisitions.html#section9

Joe_90,

Thank you for quick reply.

As I understand it my accountant has said that the partnership can not register for vat as its sole business is bus hire.

If I can, then I supply that Vat number to Uk business, purchase vehicle ex vat. Then pay 23% vat here and then de-register ?

What happens to the UK vat ?

Thanks...

I think you have to register in relation to Intra EU acquisitions only.

If you are registered for VAT in Ireland then you don't suffer UK VAT.

Thank you,

I have asked my Accountant to look into this.

You may be able to reclaim the Irish VAT if the coach is less than 2 years old. This is despite the fact you do not charge VAT on your sales. VAT Form 71 sets out the details on this scheme - http://www.revenue.ie/en/tax/vat/refunds/repayments-unregistered-persons.html#section14

Thank you for reply.

The vehicle in question is well over 2 years old unfortunately. I understand that I cannot reclaim the VAT. My issue is with having to pay English and Irish VAT. I have been reading the revenue pages but I am still not clear on how this works.

I am still waiting on my Accountant to give me an answer on this.

Joe_90 is correct. You must register for VAT on intra EU acquisitions and charge yourself VAT. http://www.revenue.ie/en/tax/vat/guide/eu-acquisitions.html#section9

Charge myself VAT ?

Yes - you put in the Irish VAT figure in the VAT on Sales box ("T1") on the VAT return. If you cannot reclaim this VAT you leave the VAT on purchases box ("T2") as nil. You then pay over the VAT on sales figure to Revenue.