Last week the Institute met with HMRC’s VAT policy team to discuss in detail feedback received from our members and their clients that the 31 October 2023 deadline for selling second-hand cars bought from Great Britain and moved to Northern Ireland before 1 May 2023 should be extended. Under the current rules, such vehicles will not be able to use the VAT margin scheme if these vehicles are sold after 31 October 2023 meaning VAT must be charged on the full selling price. HMRC’s current view is that 31 October 2023 is still the deadline and dealers should make all attempts to sell these vehicles before that date. The Institute pressed HMRC to consider an extension and also said that if an extension is granted, this decision should be made and announced as soon as possible.
If your car dealer client has not yet sent in supporting evidence to demonstrate the ongoing difficulties being experienced in selling these vehicles, HMRC is still willing to accept such evidence which can be emailed to the Institute. We would recommend that this is done as soon as possible.
By way of reminder, the information requested by HMRC is details or estimates in respect of the following:-
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The numbers of second-hand vehicles dealers in Northern Ireland had in stock on 1 May 2023 that were sourced from Great Britain;
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How many of these remain unsold at present, and their estimated value;
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How many are likely to be unsold on 31 October 2023, and their estimated value; and
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If there is any category of vehicle that may be particularly affected by having a cut-off date of 31 October 2023 after which the margin scheme could no longer be used.
The Institute wishes to thank those members and their clients who have already provided information to support the need for an extension.