I have recently discovered that as a second owner my bike has no warranty coverage whatsoever even though it is only 7 months old. I have seen numerous adverts for ebikes less than 12 months old with the addition of a statement to the effect still under warranty by XXXX. Has anyone had experience of any such outstanding warranty being honoured as a second user, or is it a case of caveat emptor?
ebike warranty
- Thread starter skoolrun
- Start date
The warranty only belongs to the first owner buying new, unless specified otherwise by the supplier.
That's one of the reasons that I think second hand prices for most things are far too high.
The other reason is that only a buyer from a VAT registered source pays VAT.
Therefore someone buying secondhand privately should deduct the entire VAT from the new price, and then deduct the ageing amount from the residue to arrive at a fair second hand price.
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That's one of the reasons that I think second hand prices for most things are far too high.
The other reason is that only a buyer from a VAT registered source pays VAT.
Therefore someone buying secondhand privately should deduct the entire VAT from the new price, and then deduct the ageing amount from the residue to arrive at a fair second hand price.
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Mysterious VAT
Of course, what comes next is purely 'horse-trading'
I don't think horses (or any livestock) are liable to VAT, being either zero-rate or exempt.
So whatever is part of the VALUE of the goods (e.g. the warranty) will improve the asking price. VAT is also part of the value if one must pay it at some point when buying a taxable good. The fact that the vendor is not registered is of no consequence, he has already paid VAT to his supplier. There is a point in this argument where the non-registered trader is at an advantage: he does not need to 'add' VAT to his mark-up to make a profitable recovery.
Peter
I have, on the rare occasion that I have sold something (used), have had deployed against me the fact that I am not registered for VAT purposes and therefore cannot charge it. We must substitute "cannot identify" it or "need not account for it to HMRC". The price (value) is what it can be expected to attract compared with the New Price (including VAT or not). If the potential buyer cannot obtain it more cheaply than the new price on which the seller has based his asking price he has really lost the argument. That I think is the real test.
Of course, what comes next is purely 'horse-trading'
I don't think horses (or any livestock) are liable to VAT, being either zero-rate or exempt.
So whatever is part of the VALUE of the goods (e.g. the warranty) will improve the asking price. VAT is also part of the value if one must pay it at some point when buying a taxable good. The fact that the vendor is not registered is of no consequence, he has already paid VAT to his supplier. There is a point in this argument where the non-registered trader is at an advantage: he does not need to 'add' VAT to his mark-up to make a profitable recovery.
Peter
You may say that Peter, but I will not pay any proportion of VAT on a private purchase. No purchase of a rated item is essential, since essentials are zero rated, so whether an item is available cheaper elsewhere or not is immaterial.
If it's not, it doesn't have to be purchased, all that's needed is the discipline to walk away.
In the days of Purchase Tax the position of private second hand purchases was much clearer, since it didn't apply under any circumstance to those. The theoretical difference with VAT is an accidental by product of the change, not an intentional one through legislation.
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If it's not, it doesn't have to be purchased, all that's needed is the discipline to walk away.
In the days of Purchase Tax the position of private second hand purchases was much clearer, since it didn't apply under any circumstance to those. The theoretical difference with VAT is an accidental by product of the change, not an intentional one through legislation.
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VAT loses its identity in the sale of second hand goods between vendor and purchaser. Registered Traders in second hand goods do not account for a proportion of the full Selling Price (@ 17.5%) e.g. on used cars and used electric bicycles to HMRC. The amount of VAT they must pay over:
1. Cannot be charged to the purchaser (as VAT).
2. Is based upon the Selling Price to the ultimate purchaser less the cost price to the vendor (that cost price cannot contain a recoverable element of VAT although it may seem like it because the vendor may have taken it into account in his mind when fixing his asking price). It is the profit element multiplied by 17.5/117.5 (not quite 17.5% of the profit) that the vendor must account for to HMRC. If there is no profit there is no VAT to be accounted for. If the final Selling Price is less that the cost price, the 'loss' may not be deducted to create a minus amount of VAT for the purposes of arriving at the amount of VAT to be remitted to HMRC.
3. In deducing whether or not VAT had been added to (included in) the Asking Price a prospective purchaser would have to enquire of the seller. The seller would be truthful if he said "No", no matter how he had arrived at his price.
4. The bargain will then rest upon whether the asking price is reasonable taking into consideration the best price that the item commands on the open market; making allowance for warranty, condition, age (depreciation) and ultimately the value that the purchaser sees in the item.
If the purchaser is against the way taxation is raised in the UK (let us confine ourselves to that narrower market place) then he may carry a placard to that effect but it will not alter the fact that no VAT is 'chargeable' to the purchaser of some second hand goods.
In essence, where VAT is charged, it must be capable of being legitimately shown on a Bill of Sale by a registered trader as an addition to the base price "plus VAT @ 17.5%........" or as part of a total price inclusive of VAT "includes VAT @ 17.5%"
There is an anomaly in some trading situations. A Registered Trader who sells a commercial vehicle must show the amount of VAT on the item and that must be accounted for to HMRC. The reasoning behind this rule is because the 'asset' has been used by the trader and he recovered the VAT on his 'input' deducting that tax from his output tax (the tax on his supplies of goods or services) at that earlier time.
Any one who buys that vehicle who is registered must pay the VAT to the vendor (and he will recover it from HMRC): anyone who buys that vehicle who is NOT registered must pay the vendor the price including the VAT (who will remit it to HMRC) but that purchaser has no means at his disposal by which he can recover it.
Thus, in this narrow scenario, the unregistered purchaser can only do a better deal by reference to the asking price.......or he may walk.
Peter
But that largely refers to traders Peter, and I'm only referring to a private purchase that is private in every sense.
Legislation does not in any way enter into this, so neither do legal interpretations on taxation.
I perceive that a proportion of the price the original purchaser paid was taxation, not in any way a part of the true cost and value of that product, so I will only pay a fair proportion of the original price before taxation. There is no such thing as a second hand taxation amount, in a purchase where taxation does occur, it applies momentarily in time and then no longer exists.
And I don't pay for things that don't exist.
I sell the same way too, so I am consistent.
(There isn't a smiley with a halo for me to use! )
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Legislation does not in any way enter into this, so neither do legal interpretations on taxation.
I perceive that a proportion of the price the original purchaser paid was taxation, not in any way a part of the true cost and value of that product, so I will only pay a fair proportion of the original price before taxation. There is no such thing as a second hand taxation amount, in a purchase where taxation does occur, it applies momentarily in time and then no longer exists.
And I don't pay for things that don't exist.
I sell the same way too, so I am consistent.
(There isn't a smiley with a halo for me to use!
).
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I admire consistency.But that largely refers to traders Peter, and I'm only referring to a private purchase that is private in every sense.
Legislation does not in any way enter into this, so neither do legal interpretations on taxation.
I perceive that a proportion of the price the original purchaser paid was taxation, not in any way a part of the true cost and value of that product, so I will only pay a fair proportion of the original price before taxation. There is no such thing as a second hand taxation amount, in a purchase where taxation does occur, it applies momentarily in time and then no longer exists.
And I don't pay for things that don't exist.
I sell the same way too, so I am consistent.
(There isn't a smiley with a halo for me to use!
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Yes I agree: If you buy as a Private person from a seller who is a Private person, then VAT will not become identifiable in the asking price.
But that is what I was saying: It is only traders who must declare the presence of VAT in a deal and identify it by one of the two methods I outlined ('Added' or 'included') UNLESS the goods are Used (and the trader operates under the Margin Scheme for Second Hand goods. Another element in fixing the asking price in both the new and second hand markets is Competition. Having ascertained what it is, one then reduces one's asking price to make the item attractive - conversely the price being ask by the competition might induce one to raise ones price.
But there are no hard and fast rules for calculating depreciation and obsolescence - just rule of thumb.
Turning now to the contract between two private individuals (that is to say neither is registered for VAT purposes), what would the seller take into consideration when alighting upon his asking price?
I would suppose it would be based upon what he paid for the item (amongst other things) and what would have to be paid for the item in the present circumstances.
So let one suppose that a person had purchased, say, a TV set from a retailer and had paid £587.50 (which includes VAT of £87-50) how much would that person hope he might recover if he offered it for sale? He would not be concerned that he could not legally charge VAT to the purchaser, but he would endeavour to recover as much of his cost (£587-50) as was possible. He would expect to lose money because he does not have the same facility as the dealer; he is not in a position to give the same service and he has had some use of the item. But he would not reduce his expectations by £87-50 because that part of the cost to him was described by the 'the government' as tax.
What is the true value of a new item supplied by a registered trader? If it is not the price including VAT, no one would buy it - except for the fact that one cannot buy it anywhere else cheaper (except by shopping around and meeting the same 'theoretical' element of tax albeit at a lower amount). In the 'unwritten' rules for VAT, all goods compete on a level playing field, price +/including VAT, unless they fall off the back of a lorry.
Of course, in the fullness of time, the asking price might bear absolutely no relationship to the price (inc. VAT) when new and the elements which went to make up that original price will have no bearing on the asking price. Then it becomes a case of "what the market will bear".
Peter
Of course, and I don't disagree on the facts of the situation as it stands, but I have an interest in it standing no longer for goods that are fairly new when resold.
The fact that goods can be sold second hand inclusive of taxation originally paid is very convenient for government in that it's helpful in the extraction of ever higher taxes.
The inability to recover those in many areas when reselling would help seize up markets and depress the economy, thus restraining the government's ability to impose high levels which added to that problem. Imagine how it would affect the motor industry for example.
Income tax was less than 1.7% a hundred years ago, and there was no purchase tax, so anything that restrains the inexorable rise in taxation is ultimately desirable, particularly as so much of the resulting income is spent on things that the population are broadly opposed to.
P.S. Of course this subject really belongs in "The Charging Post".
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The fact that goods can be sold second hand inclusive of taxation originally paid is very convenient for government in that it's helpful in the extraction of ever higher taxes.
The inability to recover those in many areas when reselling would help seize up markets and depress the economy, thus restraining the government's ability to impose high levels which added to that problem. Imagine how it would affect the motor industry for example.
Income tax was less than 1.7% a hundred years ago, and there was no purchase tax, so anything that restrains the inexorable rise in taxation is ultimately desirable, particularly as so much of the resulting income is spent on things that the population are broadly opposed to.
P.S. Of course this subject really belongs in "The Charging Post".
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Many thanks for the information flecc, it seems that my transition from motoring to cycling involves not only the effort in tackling hills, but also a steep learing curve. I guess I will just have to put in more effort
.Hi there I have read your post on warranties and suggest you contact the manufacturer or supplier. Most reputable bike suppliers I have found (not all though) will look favourably on warranty issues for a biuke under 12 months. We at Wisper will always honour warranty issues or give telephone help on a bike sold in the UK even if it is a 2nd user. regards Doug
But you won't honour any warranty issues on Wisper bikes made by you in your factory in China and shipped by you to Germany (where they couldn't legally be sold) which are then bought by buyers in the UK at about 25% less than you're selling them here.... correct?
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