Ensure the second-hand vehicle meets the HMRC scheme criteria
- A VAT related payment claim can only be made against eligible vehicles
- The purchase date of the vehicle must be on or after the 1st May 2023
- The date of the VAT-related payment claim must be dated on or after the 1st May 2023
- The dealer must keep documentation to show the dealer’s intention to sell the vehicle in NI, and documentation to show the movement of the vehicle from GB to NI
Recording a VAT related payment claim in the DragonDMS
Open the vehicle record, go to Invoicing > Purchase, confirm that the purchase invoice has been printed.
Click on the Additional tab 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 in DragonDMS, 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