Malcolm’s insurer offered him trade value for his written off van, but they didn’t add VAT. So he asked us to investigate.
Malcolm thought the settlement he was offered after his van was written off in accident was unfair. His insurer told him they had paid the trade value for the van, but Malcolm thought they should add on VAT.
What we said
We checked the various trade guides to see whether the valuation was reasonable and found it matched the values given by the guides. However, as a commercial vehicle Malcolm’s van would be liable to VAT. So when we checked if he was VAT registered, we found that he was.
We explained to the Malcolm that the valuation was in line with the trade guides. Although he would have to pay VAT on a replacement van, he could reclaim this through his VAT return. This meant that his insurer only needed to pay the value of the van excluding VAT.