VAT Increase Will Affect Motorists
The rate of VAT (value added tax) has now increased in Britain from 17.
5% to 20%.
This is something that will have an affect on both the market for used cars, and the new car market.
Whilst this VAT increase will have a holistic impact on consumers, what will be the likely outcomes to motoring, specifically, in the aftermath of the pre-2011 influx of people purchasing vehicles to avoid the 2.
5% increase? The average price of a regular sort of family car, such as a Ford Focus, will increase by £300, and those expecting smaller, more economical cars to offer some kind of exemption, must come to the realisation that this will not be the case.
Whilst cars with a CO2 emission of less than 100g/km are exempt from congestion charges and road tax, they will not be exempt from VAT.
Used cars will also increase in cost as a result of the VAT increase.
Whilst in theory, VAT could be negated by buying used cars from a dealer who is not VAT registered, it is only private sellers who sell used cars without any heed being given to the rate of VAT - the only way to avoid the 20% then, is to buy used cars from private sellers.
One final crushing blow to anyone buying used cars or new cars is that peripheral costs applicable to motoring will also be increased by 2.
5%.
So, if you are getting a new part for your car and are getting it fitted, you will have to pay extra VAT on the part, and extra VAT on the labour.
At least the government have plans to do something about the cost of fuel.
5% to 20%.
This is something that will have an affect on both the market for used cars, and the new car market.
Whilst this VAT increase will have a holistic impact on consumers, what will be the likely outcomes to motoring, specifically, in the aftermath of the pre-2011 influx of people purchasing vehicles to avoid the 2.
5% increase? The average price of a regular sort of family car, such as a Ford Focus, will increase by £300, and those expecting smaller, more economical cars to offer some kind of exemption, must come to the realisation that this will not be the case.
Whilst cars with a CO2 emission of less than 100g/km are exempt from congestion charges and road tax, they will not be exempt from VAT.
Used cars will also increase in cost as a result of the VAT increase.
Whilst in theory, VAT could be negated by buying used cars from a dealer who is not VAT registered, it is only private sellers who sell used cars without any heed being given to the rate of VAT - the only way to avoid the 20% then, is to buy used cars from private sellers.
One final crushing blow to anyone buying used cars or new cars is that peripheral costs applicable to motoring will also be increased by 2.
5%.
So, if you are getting a new part for your car and are getting it fitted, you will have to pay extra VAT on the part, and extra VAT on the labour.
At least the government have plans to do something about the cost of fuel.
Source...