Charging me additional VAT if goods supplied after January

[jedimistress]

I chose and paid the deposit on a new car at the end of September 2009. The dealer said there was a twelve week wait. He called yesterday to say delivery date is 7th January and this is after the VAT increase. He said if the chassis number is not available in December I will have to pay the additional 2.5% VAT. I am not happy about paying extra for a car I agreed a price on back in September. What rights do I have if I object to paying the extra VAT. I feel the dealer should pay and give me the car at the agreed price. For a start, It has extended the twelve week delivery time.

[mccfluff]

do you have a vat invoice dated before 01/01/10, if so the vat is due at 15%. not sure if your paying on finance though sorry

[jedimistress]

No, no invoice, just a receipt for the deposit and agreed price.

[mccfluff]

well i'm not 100% on this but as i understand it the amount of vat chargable is dependant on the vat date on the invoice so if it is after 01/01/10 then it would be 17.5%.

[Oneeyedvic]

It depends purely on the dealers VAT point - that will probably be on delivery of the vehicle.

He is not going to change his tax point for you, as he would need to do it for everybody.

He is also, not taking any more money off you - he is giving this money to the government.

[anniebird]

I was working in a dealership at the time that the VAT rate increase from 8% to 12.5% to take effect before the new registrations on 1 August that year. We invoiced all customers who were buying a brand new car before the VAT change took place at 8% and collected the payments in full. We then paid the VAT to Customs and Excise at the end of the VAT quarter. This works because the VAT point is the earlier of date of payment or date of supply. You will have to pay in full before the end of December to take advantage of this ruling.

[buildersmate]

Its called a Tax Point, OEV, not a VAT Point and, as Annie bird says, it is the date of the invoice to the customer and is nothing to do with the date of the invoice between the distributor and the dealer.
Provided the dealer is willing to issue you the invoice dated before 01/01/10 it should have the prevailing rate of VAT at the time, 15%.
t matters not a jot to the dealer because he doen't make any money or lose money - it just means that he passes less VAT back to HMRC when he does his return.

[Skyline D]

The problem the dealer has here is his system clearly doesn't allow him to actually invoice the car until he calls it off the system using the chassis number. He's basically said, as soon as I can do that I'll invoice you but it might be after the VAT change date.

I would have thought there would be ways round that. A manual invoice would do the job (though potentially cause problems in his software when he later has to process a proper invoice).

At the end of the day, if he's not willing to issue an invoice now to sell at the agreed price using current VAT rate (you may have to accept you'd have to pay in full now to get that) then you should have the right to cancel if you wish.

[Frankieola]

the dealerwill be as eager as you to register the car and get your money however the VAT rate increase does pose a problem. If the chassis number is not available before hand the car cannot be registered and no dealer can sell or invoice an unregistered car. By registering the vehicle, the dealer gets debited for the car from the manufacturer so its unreasonable for the dealer to pay 17.5% and you only pay 15%, The money is going to the government after all. You may find this hard to believe but there are cars on sale today that do not have a 2.5% margin in them before costs are taken into account. If the VAT rate was going down would you still want to pay the price agreed in September?
If the "estimated" delivery time specified on the order has been exceeded (check the terms and conditions) then you can cancel, However any deal you go on to agree will have the VAT at the increased rate and if you have a part exchange vehicle involved, you cant expect to get the same amount.