If businesses have second-hand motor vehicles in stock that they bought in Great Britain and moved to Northern Ireland before 1 May 2023, the VAT margin scheme can only be used if those vehicles are sold by 31 October 2023. The Institute is discussing the impact of this deadline with HMRC, and the need to extend it.
We are aware that many second-hand car dealers have significant pre-1 May 2023 vehicles in stock which are selling very slowly due to the ongoing inflationary crisis and general economic conditions.
If sold after 31 October 2023, VAT must be accounted for on the full selling price of the vehicles as the conditions for the new second-hand motor vehicle payment scheme, which only applies to eligible motor vehicles moved from Great Britain to Northern Ireland after 30 April 2023, will not be met.