Commentary

718/1 The Margin Scheme on second-hand cars and other vehicles

Part V8 HMRC Notices
Part V8 HMRC Notices | Commentary

718/1 The Margin Scheme on second-hand cars and other vehicles

Part V8 HMRC Notices | Commentary

718/1
The Margin Scheme on second-hand cars and other vehicles

January 2021

This cancels and replaces Notice 718/1 (December 2020).

It applies to supplies of used vehicles within the UK and to acquisitions of used vehicles into Northern Ireland from the EU.

1 Overview

1.1 Information in this notice

This notice explains when you may use the Second-Hand Margin Scheme to account for VAT on your sales of second-hand vehicles.

It explains:

  1.  

    •     which vehicles you can sell under the scheme;

  2.  

    •     how the scheme works;

  3.  

    •     how to calculate the margin;

  4.  

    •     what records you must keep.

This notice assumes that you have a working knowledge of basic VAT principles, as outlined in Notice 700 “The VAT Guide”.

If you need more help or advice, please call the VAT general enquiries helpline (https://www.gov.uk/government/organisations/hm-revenue-customs/contact/vat-enquiries).

1.2 Changes to this notice

This notice has been updated to reflect changes to the VAT treatment of supplies of goods and services following the end of the Brexit transition period.

Paragraphs 2.4 and 2.8 have been updated to clarify the use of the scheme between Great Britain and Northern Ireland.

1.3 Who should read this notice

You should read this notice if you're registered for VAT and you make, or intend to make, supplies of second-hand vehicles.

1.4 Force of law

The VAT (Cars) Order 1992 requires businesses who sell vehicles under the Margin Scheme to keep the records and accounts detailed in sections 4 and 5 of this notice. All of sections 4 and 5 have legal force and supplement the law.

2 The Margin Scheme on second-hand cars and other

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