The new car: Series 2: Episode 1

We have been told that buying a second hand car is a good wheeze because you don't have to pay VAT. On the other hand, the second hand car dealing business does not have a very good reputation and is widely abused in popular culture. 

Bing turned up reference 2, which included a version of the image inset upper left in the snap above, with the caption 'It used to belong to a little old lady who only drove it on Sundays', which seemed to fill the bill, with car salesmen appearing at the bottom of the list right. But it was not a very big version, so I asked Google Images if he could do better and he told me that the image had been taken from the 1996 film 'Matilda', adapted from a Roald Dahl book of the same name.

He also points me at the Illawarra Mercury of reference 5, where the article appears to be for subscribers only, but I do get the clue 'Trust me - Danny DeVito - Matilda - APHO - Francois Duhamel', from where I get a rather better but still free version included above. Presumably I can get a quality version if I flash the plastic.

And the arty, black & white version above. Clearly a well-used and well-known image.

At which point, it is time to return to the matter of VAT. Lots of advice out there about VAT on used cars, but I opted for the horse's mouth, that is to say references 6, 7 and 8.

I am reminded by reference 6 (Section 3) that the basic principle is simple enough. VAT is a tax on consumption, mainly collected through businesses which sell goods and services. For the last decade or so, usually charged at 20% of the sale price of whatever it may be. With the key to the name being that a business pays tax on its exports but reclaims the tax that has been paid on its imports: the tax is, in effect, a tax on the value added. Which has the important property that it incentivises everybody to play the game according to the rules.

But it soon gets complicated - under the twin pressures of trying to be fair and trying to repel the attacks of tax dodgers.

This leads to the vat margin schemes of reference 7 and the special arrangements for second hand cars set out at reference 8.

So if you are a car dealer and sell a new car, you charge 20% VAT in the normal way. If you are a private person and you sell a second hand car, VAT is not payable at all. But if you are a car dealer and you sell a second hand car, you may elect to use the VAT margin scheme whereby you pay VAT at the rate of one sixth of the difference between buying and selling price. A number which was presumably computed to be roughly equivalent to the 20% charged otherwise.

Which seems fair enough, but what about if you are a dealer for one of the big manufacturers and you are selling a car which is not new because you have been using it for demonstrations but which has not been offered for sale in the regular way before? Once again, it seems that nothing that is important is ever simple.

On a different tack, I have been moaning about the complexity of the controls of cars. The fifteen year old C-Max was bad enough, and after fifteen years we still don't how to work lots of them - it taking us years to work out how to change the clock for Summer Time - but new cars seem much worse, with a dreadful clutter of controls in and around the steering wheel - and on one or more computer screens.

I was reminded of all this yesterday morning when I was taking my blood pressure, using our fine machine from Omron, a Japanese machine almost identical to the ones used by the doctors at our GPs. On the front, there are five controls, of which I can use just one, the toggle switch which does start and stop. Quite enough for me.

PS 1: hospitals seem to go in for something more elaborate. While I would be amused to use one of the old mercury, glass and brown wood affairs which were the thing when I was young: I imagine you would pay quite a lot for one at a car boot sale in decent condition and working order.

Sphygmomanometer being the term of trade. I wonder if the rubber parts perish with time?

PS 2: I get plenty of junk email these days, rather more junk than real, but in among them a useful feature from PayPal, of which I was reminded this morning. Each time that you make a regular payment - perhaps to some kind of charity or near-charity - you get an email receipt from PayPal, which serves to remind you that you are making the payment - and to prompt you to think about future payments, should you have moved on. Which, given that I do not check my bank statements that carefully, works for me.

PS 3: Wollongong, the home of the 'Illawarra Mercury', is about 50 miles south of Sydney and comes with a good size lake. Or coastal lagoon to be precise. For which see reference 11.

References

Reference 1: 'The new car: Series 1: Episode 4': https://psmv5.blogspot.com/2025/07/the-last-we-shall-see-of-our-once.html.

Reference 2: https://tvtropes.org/pmwiki/pmwiki.php/Main/HonestJohnsDealership.

Reference 3: https://en.wikipedia.org/wiki/Matilda_(1996_film).

Reference 4: https://en.wikipedia.org/wiki/Matilda_(novel).

Reference 5: https://www.illawarramercury.com.au/.

Reference 6: https://www.gov.uk/guidance/vat-guide-notice-700.

Reference 7: https://www.gov.uk/vat-margin-schemes.

Reference 8: https://www.gov.uk/guidance/selling-second-hand-vehicles-using-a-vat-margin-scheme.

Reference 9: https://smpsp.org/member/francois-duhamel/. The society of motion picture still photographers: I did not know that such a profession even existed.

Reference 10: https://www.omron-healthcare.co.uk/blood-pressure-monitors.

Reference 11: https://en.wikipedia.org/wiki/Lake_Illawarra.