Thanks , that paragraph “As long as the customer has taken away (or you have dispatched) the goods to them before 4 January 2011, your sale is considered to have taken place before the change” reads to me, if I have not fully completed the transaction, take the car before a vat increase , I would have to pay extra vat ?
Basically yes. Any deposit paid if I remember rightly is based on the VAT rate at the time and the balance due would based on the VAT rate at the time of collection.
I did read earlier cabinet members were saying he is not going to increase VAT but take that with a pinch of salt.
If you take the base price of your car before any Vat is added, it would be easy to play around with the VAT rate and work out what the VAT would be at 20%, 22.5% etc. Then add it to the base rate of your car.
To do this you would divide the VAT rate by 100 to make it a decimal. Then you need to multiply the VAT rate by the base price (excluding VAT)
For example if your car is £22k ex VAT and the VAT rate is 20% it would be worked out as follows
20/100=0.2 x 22000=£4400 So the car would cost £22000 + £4400VAT=£26400 on the road inc VAT.
If the VAT rate was 22.5% :
22.5/100=0.225 x 22000=£4950 so the same car would cost £22000+£4950VAT=£26950 inc VAT
If the VAT rate was 25%:
25/100=0.25 x 22000=£5500 so again the same car would cost £22000+£5500VAT=£27500 inc VAT