I suspect it is a VAt fiddle.
If someone is VAT registered they will charge VAT on a sale and have to hand it all over to Customs and Excise, less any VAT on relevant purchases, to put it crudely. If they are "buying" from you unless you are VAT registered and the van legally falls under this, there is no VAT for him to reclaim on the purchase. Therefore, by "lowering" the purchase price he is paying VAT over on £26,500 instead of £29,950.
The figures work out like this....
First scenario, purchase price less VAT - which is what the dealer is getting - is £25,489.36 (add 17.5% should come back to £29,950) on a trade in of £22,500, he makes £2,989.36.
On the revised deal, the dealer is getting £22,553.19 after vat is paid over and against a trade in of £19,000, he makes £3,553.19.
Simple, really.....
overthehill
If someone is VAT registered they will charge VAT on a sale and have to hand it all over to Customs and Excise, less any VAT on relevant purchases, to put it crudely. If they are "buying" from you unless you are VAT registered and the van legally falls under this, there is no VAT for him to reclaim on the purchase. Therefore, by "lowering" the purchase price he is paying VAT over on £26,500 instead of £29,950.
The figures work out like this....
First scenario, purchase price less VAT - which is what the dealer is getting - is £25,489.36 (add 17.5% should come back to £29,950) on a trade in of £22,500, he makes £2,989.36.
On the revised deal, the dealer is getting £22,553.19 after vat is paid over and against a trade in of £19,000, he makes £3,553.19.
Simple, really.....
overthehill
