UK GOV GRANT £5000

[BoMW]

I have just calculated my invoice by deducting the grant from the outset, it seems that I am able to save nearly £1000 in VAT if its calculated this way. Of course I could have completely got this wrong but does anyone know when the grant should be levied in the price calculation?

 

[Bunter]

I have just calculated my invoice by deducting the grant from the outset, it seems that I am able to save nearly £1000 in VAT if its calculated this way. Of course I could have completely got this wrong but does anyone know when the grant should be levied in the price calculation?

Happy to be corrected here but I believe it's after VAT. I think this because the grant is actually 25% of the purchase cost up to £5k and this page says it's cost+VAT.

https://www.gov.uk/plug-in-car-van-grants/overview

Bill

 

[Gonville]

I have looked at mine. I am not a VAT expert but I can see how it has been done.

The invoice shows the price before and after VAT.

After the addition of options there is a total line (Not sure I can brave looking at it) with 3 columns:- Ex VAT total. VAT total. Incl VAT Total.



Then there are other items:-

This includes plates, first registration and delivery. All shown ex vat, vat amount and with Vat. £25, £55 and £675 (!) are the incl. VAT amounts for those 3 things for example.

Now in with this is IGOVGR. HMRC Plug-in Car Grant. Guess what. Shown as -£5,000, £0, and £-5,000

So the grant deduction actually comes off the pre and post vat numbers the same. As it does not in itself have a VAT amount! i.e. the grant is zero rated for VAT so you are seeing a deduction from both ex VAT and incl VAT of the same amount.

As BoMW has calculated you are therefore paying proportionately more VAT as a percentage although the VAT amount paid in £ is the same.

Some policy person in Cabinet Office will likely explain that VAT percentage on EVs is now higher by using the grant than if you didn't..... :roll:

 

[BoMW]

I was ready to question the VAT calculation at the dealer today. my original quote/price clearly showed the 5k applied right near the end.
Today, on collection, the true invoice had the £5k reduction immediately after the car price inc VAT. This is how it should be, it then followed with my added options and delivery reg plates costs.

 

[Bunter]

I was ready to question the VAT calculation at the dealer today. my original quote/price clearly showed the 5k applied right near the end.
Today, on collection, the true invoice had the £5k reduction immediately after the car price inc VAT. This is how it should be, it then followed with my added options and delivery reg plates costs.

I'm obviously really confused by this, so could you explain why that make a difference to the overall VAT? Each option has VAT calculated separately on my invoice. I understand why it could make a difference if the grant was applied to the car and then that net value used to calculate VAT it isn't that, what you're describing is a more subtle difference but did it really make £1k of difference to the cost?

Bill

 

[Gonville]

Guys. It makes no difference. The trick is because the deduction is zero rated it doesn't reduce the VAT.