Hi Folks

Attention RM Owners/Operators.

Do you need a Long or Short RM Half Shaft?

A batch of half shafts are being produced in the coming weeks and the RMOOA has been given the opportunity to piggy back on the back of this order that is about to be put into production, so we do not need to worry about a minimum order quota.

Therefore if you require either a Long or Short RM half shaft please get in contact with me ASAP. The time frame is extremely short before manufacture starts, so I need any order request to me by next Thursday evening latest, any requests after that may not be accepted.

Costing –
Short Shaft (each) = £2112 total (Inc VAT) + (any carriage costs, TBC at a later date).
Long Shaft (each) = £2178 total (Inc VAT) + (any carriage costs, TBC at a later date).

The association charges 10% for handling and making the order happen(all handing fees go back into the association to help buy more parts), this is included in the costing above. All the other costing is the actual cost of manufacture, ouch!!!

Once I receive an order from any RMOOA member, I will email that person the invoice straight away, I will then need a 60% deposit for that order sent into the bank details given within 48 hrs. Sorry for the tight timelines but we only have a very short time before I need to submit any orders we require, otherwise we will miss this order date deadline. I will not put through any order without receiving the deposit. As these items are such high cost items, the association cannot afford being left with any stock if someone pulls out once the order is placed.

The cost above includes VAT, the association is not VAT registered so we cannot give you a VAT receipt. For those of you who are VAT registered, I will try and see if we can get you a VAT receipt direct from the manufacturer, however I cannot guarantee this, so please do not expect this by default, but I will try and make this happen if I can.

Please do not post your order on the forum (I only ever review the forums every blue moon!), contact me direct via - sales@routemaster.org.uk , letting me know what unit and how many units you require. I will also require in that request, full name and address for the invoice and if a VAT receipt is required (if this is possible), plus a contact phone number and your RMOOA membership number.

I hope this is some help to some members.

Thanks Mitch

PS – I know that often, these posts often cause a lot of debate on the forums, please be aware with my personal work load at present, I do not have time to get involved with any debates, I have time for direct orders only, thanks.

My bus number (if any): RMC1462

Given that some new off the shelf current half shafts for some of our trucks are in excess of £2500, that's not a bad price for a small batch order.

A substantial order would bring the unit cost down, if it does then presumably the benefits can be passed on as well.


The VAT issue is important one. It will be important to operators and business owners and could make a difference in the unit production un and costs.

I wonder if the parts section of the RMOOA should become vat registered as a separate entity? It is possible for sole traders to be voluntarily VAT registered below the normal threshold.
That does have benefits on operating costs ie fuel, communications and so on.

One for the accountants amongst us to look at.

A good move anyhow.

Voluntary VAT registration would probably benefit a lot of us on here; I got voluntarily registered many years ago and it has benefitted my business considerably.

I'm currently trying to persuade a charity that I'm doing a rebuild for to get registered as my charges with vat is having a considerable effect on their funds. Why give the tax man £20k when you don't need to?

I know being registered will have an adverse effect on individuals who are not registered; look at it from another way. If someone like myself or roy come round and fix your bus, stud that we have to buy from non-registered sources could cost 20% more as we've had to pay vat included in the price which we can't claim back; we then have to charge vat on the item when we sell it on the you!

My bus number (if any): RML2532

I'm really puzzled here, the RMOA cannot charge VAT on anything it sells as it's not VAT registered. If it collects it, it has no means to pay it to the Treasury.

Check here
https://www.gov.uk/vat-businesses/how-vat-works

My bus number (if any): RTL 960 RMC 1458, RM 1585 and loads of RTs

Simple answer VAT registered people just pay direct to the manufacturer who can offer a vat receipt and pay the 10% handling fee direct to RMOOA, at least they get the lion share that they are owed back ?

My bus number (if any): RML2747

They should get everything back if this happens. A VAT invoice from the manufacturer for the product and a VAT free handling fee invoice from the assoc.

A non VAT registered organisation is not selling a product 'including VAT', it is simply selling a product for the price it has selected - there is no VAT element in this price.

The RMOOA are not collecting VAT Brian. They are paying VAT but the total price is what will be marked up and sold on and of course the buyer cannot reclaim as we are not charging VAT. Unless a large part of the associations sales were to businesses then there is no point in voluntary registration.

Only those businesses that work for other businesses have an advantage with being VAT registered. if you only deal with private individuals (i.e. an electrician only doing rewires for home owners) it is better to be non registered. The material costs remain the same as £100 plus vat plus mark up is the same as £120 plus mark up. The end users saving is on the labour element as that would have VAT added if the contractor is VAT registered.

David

My bus number (if any): RML 2276 M1001 T806

It seems pointless for VAT registered people to needlessly pay VAT to the government when it could be reclaimed by buying from the manufacturer and the RMOOA still get their 10% cut without having to register for VAT ?
After all it would reduce the cost by over £400 per shaft ?

My bus number (if any): RML2747

I'm quite happy to pay the manufacturer's price plus VAT then pay ROOMA their handling charge. The VAT reclaimed will more than cover that.

My bus number (if any): RML2532

My bus number (if any): RTL 960 RMC 1458, RM 1585 and loads of RTs

Is there no warranty on RMOA handled goods as they are technically second hand as they have been sold on ?

My bus number (if any): RML2747

My bus number (if any): RTL 960 RMC 1458, RM 1585 and loads of RTs

I'd suggest the Sale of Goods Act applies to all new items supplied. ROOMA is in effect "the retailer" and would have to take any warranty claims on new items to the manufacturer as any high street shop would. Used or secondhand items are covered by different rules.

However, Brian is right what he says about European purchasers having to pay the 20% "surcharge".

On these and other new items being produced we are talking big money in terms of turnover and stock; I'd suggest a substantial number of prospective purchasers are fleet operators and would be vat registered, so it would make sense for ROOMA Sales to become registered.

My bus number (if any): RML2532

If VAT is paid to a manufacturer by a non VAT registered middle man then exported by him, then surely the chance of reclaiming the VAT by the importer is lost unless the importer pays an invoice directly to the VAT registered manufacturer ?
ie the added VAT element has now been absorbed into the total unit price ?

My bus number (if any): RML2747

Graham, you're correct there. If anyone supplies items to anon-registered middle man, then the middle man cannot pass on the VAT per se to another to reclaim.

So, by for instance ROOMA buying a batch of left-handed widgets from me as a vat registered person, anyone buying those widgets would not be able to claim the vat back. ROOMA can quite legitimately add the 20% vat on their purchase price to their resale price and anyone buying those would have to pay their price. The same goes for overseas buyers. Therefore to vat registered purchasers the items are 20% dearer than they need to be because there is then no separate vat on the item.

As I said earlier, there's nothing wrong with the initial supplier invoicing the end consumer directly and the consumer paying ROOMA a commission or whatever you want to call it.

My bus number (if any): RML2532

The VAT on a pair of half shafts is around £715 as a matter of interest, a considerable amount to not be able to claim back from the taxman!

I'd suggest that ROOMA ought to look again at this matter; assuming 10 sets of half shafts are being ordered, that's well over £40k. King pin sets at £150, 10 sets £1500; compressors at £750, 3 off is another £2.2k so by then we're getting close to the compulsory registration for vat anyway. It soon mounts up!

There's no escaping the fact that vat has to be paid by all of us eventually, but if there's a way of minimising that amount, then why pay more than you have to?

My bus number (if any): RML2532

This order hints that one or more of the larger operators has reached a decision to source new manufacturing, their stocks of parts held must at some time run out.The impression given in the past has been that these operators prefer to make their own arrangements and avoid the association, quite possibly because of the VAT issue. A VAT registered Association would certainly seem to be of more use to them and perhaps result in more other items being procured.

It was not really my intention to open a can of worms but the idea of Piggy Backing on a commercial or bulk order is absolutely the right way to go and something I have been advocating for years as have several others.

But the VAT issue is one that maybe Mitch needs some help with as to batten down the hatches with regard to what may get discussed on this and no doubt other forums is probably not the most prudent of options.

As an example, My firm may need to order a dozen spare Scania intercoolers. Now I could probably obtain the correct items from several sources and probably at a much lower cost.

However the bean counters will simply not ever sanction the order without a VAT number. Whatever the cost saving.

Often contractors lose out too. Many are not registered so often we cannot get payment sanctioned.
Most now go voluntary or we find other ways.

So it does seem to me that orders and ventures may well be more viable with large business/operator partners if VAT registered, even the expenses and overheads can be reclaimed and that can be passed on with lower overall costs.

It really needs an accountant to sort this and to be fair Mitch has done the coal face work in getting this far.

Maybe something for the officers and the association treasurer to discuss as a matter of urgency rather than bother Mitch with it all.

My bus number (if any): RML2532

Yes I would hope that might be the direction to go.

After all there are members from all walks of life and offering ones expertise for a common cause is the pillar of any association or club.

Mitch has made great moves forward in the parts area , and the direction the association is moving in as a co-ordinator of parts in acute short supply and failing quality is a good thing.

So hopefully there are a few financial/taxation and legal experts in the association that will muck in and make things than can happen actually happen.

That can only be good for all Routemaster owners whether preservationists or operators..

you don't need to be a financial or legal expert to register for VAT. :)

My bus number (if any): RML2532

True, But you do need sound advice and guidance and mentoring when it comes to liabilities.

And the best options for utilising every penny to benefit members without compromising quality.

Plenty of people get in a right mess with VAT and even basic accounts and yet they are often brilliant at what they do, trade or otherwise.

One question is how many Routemaster owners are actually VAT registered, and by that I mean those that can legitimately reclaim for their bus parts rather than someone that conveniently uses their unrelated business to buy parts for their hobby. Unless they are it makes no difference.

David

My bus number (if any): RML 2276 M1001 T806

I suggest only a survey of members would reveal that. It would seem that there's a substantial number of each type of member in the association; those who run RMs as a business, even part-time, would more than likely be registered.

Bus travel is currently 0% vat rated, so anyone operating and not registered is a bit daft in my opinion. Those who are operating tend to have more than 1 RM as well, so would potentially be in a position to carry a stock of special order items to help others in the future as well as to minimise disruption to their own businesses when parts break.

That is certainly so in my case; as I've mentioned before, I carry a stock of parts both new and refurbished both to keep my bus on the road but to get others going when they have problems. If I was not vat registered., it would be a substantial financial burden to keep that amount of slow-moving items on the shelf.

My bus number (if any): RML2532

Even though I get nowhere near the threshold for VAT I have always been registered. The benefits to me are enough to say that without it I would simply pack up. The VAT reclaimable on operating expenses set against labour-only revenue is a surprisingly high percentage; sufficient that if not reclaimable then the labour rate would have to go up considerably. However this is not solely the major benefit, the small profit from parts sales to VAT business customers would disappear, but more importantly the control over ordering those parts so that they are available when I want them rather than when the busy customer remembers to get around to it, enables me to plan jobs around one another and to avoid as many idle days as possible. I can estimate scenarios for others which would require a percentage increase in labour rate in excess of the 20% VAT surcharge. We all have to pay tax, it will either be on what we spend or on what we earn.

Gents

Interesting conversation going on here.

As a Routemaster Operator (who is VAT registered) and a RMOOA committee member, I do not know why the Association is not VAT registered, but there must be a good reason.

My guess is that the vast majority of our members are non VAT registered private individuals, so should the Association become VAT registered then obviously everything would then become 20% more expensive, membership, models, parts, books etc would all be subject to VAT to individuals unable to claim anything back.

However, in the case of the half shafts as these are technically not being produced (and paid for) by the RMOOA then we need to explore the VAT situation with the manufacturer/supplier; I agree if a VAT invoice could be supplied then there is a massive saving to those who are VAT registered but how we go about this I do not know.

Ray Thear the Associations Treasurer is currently on an extended holiday, so I don't think you will get a definite answer anytime soon as we will probably need to consult our accountants for advice.

We do have a committee meeting planed for early December, so I will bring this up then and I am sure one of us will report back on this forum once this has been discussed.

David

My bus number (if any): RM548, RM765 and RM1783

If the RMOOA were VAT registered then surely as they would be able to reclaim the VAT added to items bought in, the mark up would be on a lower unit cost so the extra VAT added on to the final cost would be balanced out leaving the retail cost roughly the same for non registered members, but vastly reducing the cost of these major items for VAT registered customers ?

The reduction in end unit cost to VAT registered members would hopefully be an incentive for larger operators to place orders thus increasing the production run and making unit costs cheaper for all members ?

I doubt many other organizations reselling items priced at over £2,000 each are non VAT registered ?

The only discipline is that VAT returns have to made regularly and on time to avoid fines so perhaps an added cost of a book keeper may be incurred.

My bus number (if any): RML2747

That's great to hear David. It has to be worth discussing as options exist which might well be of great benefit in terms of parts sourcing and remanufacture, procuremnt and a great deal for end users - ie members

The association is as I recall for owners and operators and while that has been less evident over the last decade, now is probably a good time for that broad range to benefit under one umbrella.

Not being an accountant, I had to get someone in the office to explain this a bit to me and this is her simplified example

To my mind, correct me if I'm wrong, anything that the RMOOA currently purchases new will be inc Vat at purchase.

The exception being second hand and private transactions.

So as the VAT is paid through to the end user, an unregistered trader will pass the cost on automatically.

So for example: The Assoc buys a radiator cap for £10 + Vat. That's £12. Then factor in the mark up to cover delivery, storage and packaging and of course a small profit to plough back in.
So lets say it now costs £15.

The vat is not recoverable but as the Assoc has paid it at purchase, so eventually, will the member in just the same way most of us do when we go shopping in the high st.

So it might not be possible to pass a saving on to the end purchaser if they are not VAT registered.
But. It might be possible if VAT registred to make overheads savings that could reduce the final selling price inc vat.

And that's good for those who are not Vat registered end users as well as those who are.

Hi Folks.

I have had a reply from the manufacture today.

With regard to warranty for ths half shafts, this will be valid for 1 yr.

On the hot topic of VAT, the manufacture has confirmed they will supply indervidual VAT reciepts for all persons who require to reclaim their VAT.

On the long term issue of VAT, as David Lee has mentioned this will be discussed at the next committee meeting.

I hope the above is helpful for those of you who wish to place an order.

Regards Mitch

My bus number (if any): RMC1462

Well done Mitch - that's good news

My bus number (if any): RML 2747

Good news there Mitch on the VAT front, it certainly makes good business sense for a number of us. You should have had my deposit through the bank system by now.

My bus number (if any): RML2532

Very happy to see that the Assoc is now so pro active and responsive in this area.

I've always maintained that this is the way forward and its great to see those efforts really coming together.

Well done to all those who put the hours in. Fingers crossed it will all work out.

It's very good news that the association are going forward in getting some very important parts remade. Well done everyone involved in this process.
The only thing I will say just make sure they are correct and don't melt like the last batch.
Tony