Santander credit agreement wrongly charges 20% VAT on static caravan

[loobs]

Hello to everyone, I am a new member and I am interested in other members views on a credit agreement taken out with Santander in Oct 2011.

 

My wife bought a static caravan in 2011; the invoice total was for £37000, which included £31000 for the caravan and additionally, further site costs of £6000.

 

The Santander agreement signed to finance the purchase totals £37000; however, it states that the purchase is for a static caravan: value £31000 plus £6000 VAT.

 

The agreement says that Santander has purchased the caravan on behalf of my wife and owns the caravan until the full price is repaid.

 

My query is about the inclusion of VAT in the agreement and its effect on the enforceability of the agreement. Would they be legally entitled to reposess the caravan if we stopped the payments.

 

I would grateful of any informed views and suggestions as to how to proceed with this.

[jo5ephedward5]

I'm not sure I understand the question - is it that the agreement is wording incorrectly and lists the site fees as VAT? If so I personally think you'd struggle to argue this as a reason to stop paying? I'm sure others will have further insight.

 

It seems to me like you genuinely owe this money so looking for a technicality to get out of paying for a 37k caravan doesn't seem moral.

 

Have you got an invoice from the sale, what does that say? I ask as 6k is approx. the correct figure of VAT for 31k isn't it?

 

J

[loobs]

Thank you for your reply. It is not simply incorrect wording: VAT on static caravans was not introduced until 2012; this caravan was purchased in 2011. At first glance it may seem immoral to attempt to duck out of a £37000 loan and until a few months ago I would have agreed but that all changed when I became the victim of a fraudulent withdrawal from my account: Santander's response was to duck out of their own 'charge back' policy and hit me with the cost of three bouncing direct debits.

 

So no, its not immoral; its justice! ...and it feels good. My view of the banks now is - hit them if you can: nothing is immoral against these corrupt multi nationals.

 

Therefore, my own view is: if the credit agreement includes VAT on goods when VAT was not chargeable, the whole agreement must be wrong and unenforceable. Does anyone know if this is correct.

Edited May 23, 2013 by loobs

[tedney]

I would check with HMRC first. I think they would be interested if someone was charging VAT when none was due. The word fraud comes to mind. If your figures are correct. Caravan was £31,000.00 no VAT. Site fees etc £6000

00, so VAT due on fees is £1200.00, if they have charged you £6000 VAT that is definitely not correct. The fine print of your agreement possibly just references a sum of money on the loan, so I don't think incorrect details would carry much weight, but incorrect VAT from HMRC does.

[Realist]

The £6,000 was most probs put in the wrong section of the agreement and vat was not charged at all, its just written in the wrong place.

[tedney]

The £6,000 was most probs put in the wrong section of the agreement and vat was not charged at all, its just written in the wrong place.

 

From my own first hand experience: if VAT is shown as charged on an invoice, either a correct or an incorrect sum, then HMRC expect that VAT to be accounted for. If it was incorrectly entered on an invoice (the point at which VAT is applicable, not a credit agrrement) then HMRC would need a correcting entry, and confirmation that the correct VAT has been paid, or not paid/accounted for as the case maybe.