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Monday
Nov012010

Car Dealers Could End Up With a Shock VAT Bill

I always keep abreast of the latest news to affect certain types of businesses as far as tax and VAT is concerned. Some rules apply to some businesses more than others. This means that news reports such as the one concerning car dealers are always worth reading.

Apparently the HMRC believes it has paid back too much VAT to some car dealers in relation to the cars used as demonstration vehicles. In this case any dealerships that are affected would be required to pay the VAT back.

The situation refers to partial exemption rules and not all dealerships and traders will be affected as such. However those that are could find themselves having to get the money to pay back a sum of VAT to HMRC in the near future.

Unfortunately for those dealers who will be caught out by the rule, this is a perfectly legitimate process for HMRC to go through. It is advisable for all those who are requested to figure out whether the situation applies to them to work out their sums as soon as possible. I can imagine some businesses will find themselves with a sudden and unexpected bill to pay, but they may wish to seek the advice of their accountant to make sure all the figures are correct and they follow the instructions that are given by HMRC.

I should stress that this applies to car dealerships only. It is one of those occasions where a particular business is affected by a rule or situation that does not come into force for any other business. However if you are affected and you wish to contact St Matthew for advice, you can use the contact link given above.

 

 

 

 



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