Government Reinstates Used Car VAT Margin Scheme For Northern Ireland
20th January 2021
Dealer Management System and Car Dealer Website provider Dragon2000 detail the latest news below regarding the use of the used car VAT Margin Scheme for dealers in Northern Ireland.
Initial government guidance published in late December stated the second-hand Margin Scheme would no longer apply for sales in Northern Ireland where the stock was purchased in Great Britain after 1 January 2021. This would mean a 20% increase to the consumer for such vehicles.
Dealers in Northern Ireland and trade bodies alike were therefore relieved by Michael Gove MP’s recent announcement confirming that “HMT and HMRC will reinstate a margin scheme to ensure that NI customers need pay no more than those in any other part of the United Kingdom.”
New guidance on sales of second hand motor vehicles in Northern Ireland has now been published on the government website confirming that dealers can benefit from the used car VAT Margin Scheme on vehicles bought from Great Britain, in addition to vehicles bought in Northern Ireland or the EU.
It also states that for those dealers who bought vehicles in Great Britain after 1 January 2021 and subsequently sold them in Northern Ireland with VAT charged on the full selling price (following the initial guidance at the time), these vehicles would now be eligible for the VAT Margin Scheme – and the value can be adjusted where the additional VAT has been paid back to the customer.
If you would like more information about our dealer management system, car dealer websites or mobile apps, please contact our sales team at sales@dragon2000.co.uk or call 01327 222 333.
