Archived posting to the Leica Users Group, 2001/02/11
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>Yes, in the UK,
>The rate of vat on second hand (used) goods was changed a year or so
ago.
>And what Ffordes stated is correct. 17.5% no longer applies to the
whole price, merely the
>profit margin ('mark-up') on that item.
>Jem
Thanks, Jem, for the clarification. An interesting system that. Most
dealers hate to have to tell anyone what their margin is because as
soon as people find out what you make they want to bicker and bargain.
Since in my experience used camera sales often make the margin which
keeps the rest of the operation afloat, that's sort of a problem. But I
suppose under the current system you would have to let people know what
your margin is.
On the other hand it was easy to make mistakes under the old system. If
a VAT charging dealer purchases equipment from a non registered private
seller you could easily mess up the amount you are supposed to send to
HMG which in that case isn't just the difference between VAT paid and
VAT collected. I found this one out the hard way the first time we were
audited a few months after we opened the store. Fortunately, they were
understanding and let us pay back what we owed from our mistake in
installments.
Simon Stevens