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Do I have to pay VAT on a used car?
I'm about to purchase an ex-demo Volkswagen T-Roc from a main dealer for just under £22k but the invoice says it includes 20% VAT at around £3665. I thought secondhand goods were exempt from VAT?
Asked on 6 February 2019 by Bridget
Answered by
Honest John
VAT is paid the first time a car is sold, but if the car is 'VAT Qualifying' (which a demo car would be) the dealer could claim back his VAT input tax and would then have to charge VAT as part of the price of the car when he re-sold it. Makes no difference to a private purchaser. The price you pay is the same.
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