Annie-Lee Cox

Thank you for your reply. The manual speaks of meal and subsistence as it relates to lorry drivers and overnight stays, which I assume does not include parking costs. The drivers are using the company lorries to deliver or collect vehicles. Where they have incurred parking costs for overnight parking, should this not be reimbursed to the lorry drivers? Is this not, separate from the scale rate payments to drivers and should be dealt with separately? Please let me know. Thank you

How should a company account for where an employee (in this case, a Lorry Driver), pays for overnight parking at a truck stop which includes a food voucher? The company operates a benchmark scale rate payment in addition to the incidental overnight expense, as such, the employee receives £30 of tax free amount via payroll (£25 for 15 hours and ongoing at 8pm plus £5 for incidental overnight). The employee uses a truck stop for overnight stay and is charged £33 which they pay out of their pocket (£30 parking and £3 food voucher). Should the employer reimburse the employee in full for the parking costs of £30? How much of this costs as it relates to parking should the employer reimburse to the employee, if any? If the parking costs should be reimbursed to the employee, are there any conditions that should be met for this to be reimbursed? For example, a truck stop charges £29 for parking only but if the employee pays £31, they get a £12 food voucher. So for an additional £2, they get an extra £10 to purchase food. In this scenario, should the employer reimburse the employee £29 for parking expense or £19 (£31 - £12). The reason behind the £19 is that the employee is already receiving £30 for food and subsistence which covers the £12. Also where the receipt received from the employee does not show a breakdown of how much of the payment relates to parking and what relates to food voucher, what amount should be reimbursed to the employee? As this parking costs relates to VAT, can the employer reclaim the VAT incurred on the parking costs, provided the employee provides a VAT receipt? In the above example of the £31 paid for parking plus food voucher, if the employer reimburses £19, is VAT reclaimable only on the £19 reimbursed or the £29 being the parking costs? Where it is unclear from the VAT receipt how much of the payment relates to parking and how much relates to food voucher, if any, where the full amount is considered to be parking, can the VAT amount be reclaimed in full? Is it advisable that employers carry out an investigation with the truck stop involved to assess how much relates to parking and/or food voucher, if any? Before reimbursing the employee or reclaiming VAT on parking?

Good afternoon. I would like some clarification of the VAT Legislation regarding the supply of goods, in this case second-hand vehicles, sold to a business that is established in the EU or another country outside of the UK. The VAT Guide Notice 700, states that in this scenario, the VAT treatment is that where the goods (vehicle) are to be removed (exported) from the UK and proof of exportation is available, no VAT is chargeable. If no proof of exportation can be provided, then VAT is chargeable. We have sold a VAT Qualifying second-hand vehicle to a customer located in Ireland; no proof of exportation was provided at the time of purchase. The purchase took place via our auction website and VAT has been charged on the sale of the vehicle. Various parts of the VAT Legislation, states that goods must be physically exported from the UK and evidence of export must be obtained to support zero-rating supply otherwise the goods are subjected to standard rated VAT. We have correctly charged the customer VAT at the time of their purchase of the vehicle. We do not get involved in the exportation process of vehicles purchased from our auction website, we have customers/buyers located across the world using our platform and we do not have any details of what happens to the vehicles after they are collected from our yards or delivered to an address supplied by a buyer, as such where a VAT qualifying vehicle is sold VAT is charged at the standard rate of supply as no proof of exportation is supplied. We have advised all our customers where this applies, that they can reclaim the VAT direct from HMRC using the VAT65a form as per the guidance provided by HMRC. To have a better understanding of this process, could you please advise us where we went wrong so we can advise our customers correctly. In addition, if the overseas refund scheme cannot be used for VAT on goods that have left the UK, could you please let us know the correct procedure for reclaiming the VAT so we can pass on correct information to our customers. Thank you. Regards Annie

The guidance does not give an explanation for the query I have asked. It states that the purchase price does not include the cost of any repairs to the vehicle and the selling price is everything you receive for the vehicle including payments for incidental expenses linked to the sale. My query is, can the cost of repairs done to the vehicle in bringing it to sale be considered an incidental expense? I have read the guidance and everything that I can find on the scheme and there's nothing on this. Example Purchase Price £100 Repairs to vehicle £200 Selling Price £500 Which of the following would be the Margin VAT calculation (£500 - £200) - £100) * 1/6 Does the repair costs reduce the selling price? or (£500 - £100) * 1/6 Does the repair costs get excluded from the calculation? Thank you

Dear Sir/Madam, I would like some assistance on this query on calculating the margin used to work out the VAT. The company purchases second-hand vehicles from an auction website. These vehicles are then leased/rented for a period of up to 12 months to companies, schools and universities and used for research purposes. Once they are finished with the vehicles, they are returned to the company and then sold through the same auction website. No changes are made to the vehicles, they are just listed for sale in the same condition in which they are received. If these vehicles are returned damaged and has to be categorized as a Cat A or B vehicle, then Margin VAT is not considered. Where they are returned in the same/similar condition that they were leased/rented as, Margin VAT is calculated on the sale of the vehicle. The margin VAT calculation is being considered as Purchase price (this being the cost that the vehicle was acquired for when it was initially purchased from the auction site) and Selling price ( this being the sales proceed received when the vehicle is relisted on the auction site and sold after being returned to the company). Is it correct to be using the Purchase price as the cost that was paid to acquire the vehicle initially? Is this the correct Purchase price to be used in calculating the margin, when the vehicle is sold up to 12 months later after being used for another purpose? I am concerned that this may not be correct and I could not find any guidance notes to support or refute this. Can you please let me know. Thank you

Good day. I hope this is a question that I can ask in here for some assistance, if not please let me know and if you could direct me to the correct forum for this. The margin VAT scheme for second-hand vehicles is used to account for VAT on the difference between the price you pay for a second-hand vehicle and the price you sell it for, instead of the full selling price of each vehicle. The VAT is calculated by deducting the purchase price from the selling price to work out the gross margin, then multiplying the gross margin by 1/6. HMRC guidance explains the purchase price as everything you pay for the vehicle and the selling price as everything you receive for the vehicle, including payments for incidental expenses directly linked to the sale. Where a second-hand car dealer purchases a second-hand vehicle, repairs the vehicle to make it saleable, can the cost of repairing the vehicle be considered as incidental expenses directly linked to the sale? Can these costs be included as part of the selling price when calculating the margin? If so, I assume that these costs being included will reduce the selling price? Please let me know. Thank you.

Good day. I hope this is a question that I can ask in here for some assistance, if not please let me know and if you could direct me to the correct forum for this. The margin VAT scheme for second-hand vehicles is used to account for VAT on the difference between the price you pay for a second-hand vehicle and the price you sell it for, instead of the full selling price of each vehicle. The VAT is calculated by deducting the purchase price from the selling price to work out the gross margin, then multiplying the gross margin by 1/6. HMRC guidance explains the purchase price as everything you pay for the vehicle and the selling price as everything you receive for the vehicle, including payments for incidental expenses directly linked to the sale. Where a second-hand car dealer purchases a second-hand vehicle, repairs the vehicle to make it saleable, can the cost of repairing the vehicle be considered as incidental expenses directly linked to the sale? Can these costs be included as part of the selling price when calculating the margin? If so, I assume that these costs being included will reduce the selling price? Please let me know. Thank you.