How to pay for a 18K car?

[vibesg]

I've bought and sold cars in the past using all of the above means. For the CLK I paid a deposit by switch and paid the balance by cheque (5 yrs ago). Did the same for the Volvo.
The most interesting was a Mazda MX5 I sold for about £2500 a few years ago when I lived in Kent. Young lady drove up from the Midlands and loved the car. I offered her a test drive. She declined and said she had to drive back. She then pulled out all the cash out of her Jeans and offered it to me. I was gobsmacked. I invited her in and said I wasn't used to exchanging such a large amount on the street. I just imagined that curtains were twitching furiously. Very glad with the sale though.

 

[Mudster]

I'm now taking so many payments in cash I've had to buy one of the note counting/checking machines.

All of this goes through the books (yeah yeah I know you find that hard to believe - but everythign I sell has been through a port of entry so it's very difficult to run it past HMRC).

All the transcations involve VAT but I often ask why my customers pay this way, mainly it's due to being knocked so often with cheques and late payments, cash is the guaranteed way to get paid.

I had a chap come in two weeks ago to buy stock and paid £6,500 in £20 notes......it's a right nuisance and costs me over £30 to pay it into the bank.

 

[Deleted member 6183]

I'm now taking so many payments in cash I've had to buy one of the note counting/checking machines.

All of this goes through the books (yeah yeah I know you find that hard to believe - but everythign I sell has been through a port of entry so it's very difficult to run it past HMRC).

All the transcations involve VAT but I often ask why my customers pay this way, mainly it's due to being knocked so often with cheques and late payments, cash is the guaranteed way to get paid.

I had a chap come in two weeks ago to buy stock and paid £6,500 in £20 notes......it's a right nuisance and costs me over £30 to pay it into the bank.

Out of interest do you have any anti money laundering responsibilities?

 

[renault12ts]

Out of interest do you have any anti money laundering responsibilities?

Everyone has anti-money laundering responsibilities. Most investigations into money laundering are into cars purchased from dealers. Anyone receiving £6500 cash as a means of payment in conducting their trade must conduct anti money laundering checks. If these are not being done then prosecution could result.

 

[wemorgan]

I had a chap come in two weeks ago to buy stock and paid £6,500 in £20 notes......it's a right nuisance and costs me over £30 to pay it into the bank.

0.5%. Is that cheaper than credit and debit card fees?

 

[Mudster]

Out of interest do you have any anti money laundering responsibilities?

My bank don't ask questions for anything under £10,000 in cash in a single transaction, this used to be £5000 but I think it's gone up in the recent past.

Funny you should say that though, there is a constant rumour that one of the bigger companies up north in the same industry as mine is a front for laundering drug money, it's quite a high capital business, but even so I still find it difficult to see how it would be feasible considering how much scruitiny we get from HMRC.

I run a tight ship and have a chartered accountant as my book keeper and producing all my paperwork so I generally get left alone.

However the main reason I get left alone is I am a constant VAT payer. HMRC spend most of their time investigating exporters in a constant search for carousel fraud (which could be simply stopped overnight by adopting the American sales tax system rather then the nonsence we operate.)

 

[Mudster]

0.5%. Is that cheaper than credit and debit card fees?

I pay 0.55% (LloydsTSB).

Debit cards 18p per transaction

Credit cards vary for me from as little as 1.07% (VISA, Mastercard) to 2.25% for Commercial Business credit cards, and a current deal I got with American Express at 1%.

So I prefer debit cards or direct transfers.

 

[renault12ts]

My bank don't ask questions for anything under £10,000 in cash in a single transaction, this used to be £5000 but I think it's gone up in the recent past.

Funny you should say that though, there is a constant rumour that one of the bigger companies up north in the same industry as mine is a front for laundering drug money, it's quite a high capital business, but even so I still find it difficult to see how it would be feasible considering how much scruitiny we get from HMRC.

I run a tight ship and have a chartered accountant as my book keeper and producing all my paperwork so I generally get left alone.

However the main reason I get left alone is I am a constant VAT payer. HMRC spend most of their time investigating exporters in a constant search for carousel fraud (which could be simply stopped overnight by adopting the American sales tax system rather then the nonsence we operate.)

Its not you they are checking. When you receive large amounts of cash from a customer,it is the customer whom is being checked. The money laudering occurs when they pay full price to you and then sell immediately to someone else at a discount. Yes they have taken a hit, but now the money is clean. In my business in the old days people would make an investment and then encash it almost immediately taking a hit. It is this sort of suspicious activity which,if not reported, could land me in jail.

 

[Mudster]

Everyone has anti-money laundering responsibilities. Most investigations into money laundering are into cars purchased from dealers. Anyone receiving £6500 cash as a means of payment in conducting their trade must conduct anti money laundering checks. If these are not being done then prosecution could result.

I believe there is a cash limit for buying new cars at main dealers....(it was £5000 IIRC) anything over that had to be traceable transactions. Maybe Jay could enlighten us on that.

My responsibilities are to issue a vat invoice to the full name and trading address of the company concerned and get them to sign my copy of the invoice confirming the cash amount.

HMRC want a paper trail. Nothing more nothing less.

The problems occur if you produce an invoice to "Cash Sale".

 

[renault12ts]

I believe there is a cash limit for buying new cars at main dealers....(it was £5000 IIRC) anything over that had to be traceable transactions. Maybe Jay could enlighten us on that.

My responsibilities are to issue a vat invoice to the full name and trading address of the company concerned and get them to sign my copy of the invoice confirming the cash amount.

HMRC want a paper trail. Nothing more nothing less.

The problems occur if you produce an invoice to "Cash Sale".

Just checked. Its 15000 Euro.

 

[Mudster]

Just checked. Its 15000 Euro.

That sounds about right, it was rasied to £10K that was set when the Euro was closer to £1 = €1.50.

 

[proser]

When I used to do Land Rover shows, a lot of the customers would pay in cash, and over a weekend that could amount to over £10K in cash alone. To save paying the bank their fee for banking it, I would pay the cash into my personal account and then write a cheque for the same amount; that way I paid 65p instead of over £60

 

[Frank O' Phile]

just don't do what I did - stuff a whole load of 50's in my underpants

Next time, try sticking it down the front!

 

[Mudster]

When I used to do Land Rover shows, a lot of the customers would pay in cash, and over a weekend that could amount to over £10K in cash alone. To save paying the bank their fee for banking it, I would pay the cash into my personal account and then write a cheque for the same amount; that way I paid 65p instead of over £60

Damn good idea that.

 

[Mactech]

When I used to do Land Rover shows, a lot of the customers would pay in cash, and over a weekend that could amount to over £10K in cash alone. To save paying the bank their fee for banking it, I would pay the cash into my personal account and then write a cheque for the same amount; that way I paid 65p instead of over £60

And of course the taxman would have no intrest in the odd £10k bobbing in and out of your personal account.....

 

[Mudster]

And of course the taxman would have no intrest in the odd £10k bobbing in and out of your personal account.....

As long as it's accounted for, it simply wouldn't be questioned.

Explaining you are paying it in that way to avoid £60 in bank charges is perfectly acceptable.

The bank of course may take a dim view if I started doing this on a daily basis.

 

[J400uk]

Interesting thread. I think CHAPS is safest but I suppose it depends on the car and the circumstances etc.