The second-hand motor vehicle payment scheme is a scheme that was introduced on the 1st May 2023. It replaced the VAT margin scheme for second-hand vehicles purchased in Great Britain (GB) and moved to Northern Ireland (NI) for resale.
The second-hand motor vehicle payment scheme allows dealers to claim a VAT – related payment on their VAT Return if they are:
• VAT registered in the UK and have a business establishment in the UK
• Buying an eligible second-hand motor vehicle in GB
• Moving that vehicle to NI with the intention to resell it in NI or to the EU
This article has more information about the Government scheme – Northern Ireland – Second-hand vehicle payment scheme – Knowledgebase
Recording a VAT related payment claim in the Dragon2000 Portal
On a vehicle that meets the scheme criteria, open the vehicle record, go to Purchase, and check that the purchase invoice has been printed.
Click on the Additional sub menu and click on the Claim button. Enter the Exported Date – you must have supporting documentation that shows the vehicle was moved from GB to NI on this date.
You will see the purchase value and the payment amount, to confirm click Save.
*If the export date is more than 3 months from the purchase date, it is your responsibility to revalue the vehicle, if the value has reduced, then record the difference as a write down. The purchase value used to calculate the payment amount will then use the purchase price less write down value.
Selling price and other additional items
When a VAT related payment has been added to an eligible second-hand vehicle, VAT will automatically be calculated on the selling price and added to any dealer fitted extras.
Reports
Sales Report – When a vehicle that is on the Second-hand Motor Vehicle Payment Scheme is sold it will show under a new category on the sales report
Second-hand Motor Vehicle Payment Scheme – A new report in the Accounts reporting section under Used Vehicles, this report lists vehicles moved to NI or the EU
Accounting for the VAT related claim on your VAT return
Sage50 Integration – dealers using the Sage Integration do not have to do anything – after a claim has been recorded, the next time the Sage Integration is run we will post the the VAT related payment which will then be picked up in your next VAT return.
Manual Accounting – dealers who do their accounts manually will need to run the Second-hand Motor Vehicle Payment Scheme report and manually make the claim on your VAT Return treating the payment amount as if it were input tax.
Gov.co.uk – How to claim a VAT related payment on your VAT return