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Kate,
that isn't quite right.
Your write out an invoice for £11,750 (ie £10k+VAT)
They write out an invoice for £11,750.
No cash changes hands.
HOWEVER - you then pay HMRC £1,750 on the sale (assuming you are on the normal vanilla scheme for VAT)
If you think about it you have already reclaimed from HMRC the VAT on the purchase, plus VAT on your costs of renovation so its not quite as bad as it sounds but might well not be the deal you meant it to be!
NB if you are giving them a £250 discount to your sales price to bring it down £11,500 (their value) then you would presumably write your invoice out at £9787.23+VAT=£11,500 which will benefit you slightly as the VAT due to HMRC would be less. This is ok so long as its a normal commercial transaction. Ie you would presumably haggle on the price of vehicles in the ordinary course of your trade.
+ apologies to Peter for stepping on his toes on this, but I don't think he is about on the forum during the working day, he tends to be an evening poster.
Regards,
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