The UK government has confirmed that the VAT Margin Scheme will be reinstated for used car dealerships in Northern Ireland, a move that has been welcomed across the industry.
Yesterday’s announcement comes after an intense lobbying campaign from independent used car dealerships, local MPs, and the NFDA (National Franchised Dealer Association).
Following our significant lobbying efforts, it is extremely positive that the Government has confirmed HMT and HMRC will reinstate a margin scheme which will avoid an immediate price increase for thousands of second-hand vehicles and the resulting detrimental impact on dealerships and consumers in Northern Ireland as well as Great BritainNFDA chief executive Sue Robinson
VAT margin schemes available to used car traders in Northern Ireland allows them to pay VAT on the profit earned in the sale of a motor vehicle, rather than its entire value. A significant difference ranging between hundreds and thousands of pounds.
Losing this scheme would see profit margins significantly reduced, if not entirely wiped out. The scheme also makes it more affordable for used car buyers, as they pay much less VAT than the 20% imposed on new vehicles.
Without yesterday’s announcement of the reinstatement, the VAT margin scheme would have remained unavailable to traders operating in Northern Ireland who purchase their stock in GB.
Michael Gove MP confirmed yesterday in parliament…
“HMT and HMRC will reinstate a margin scheme to ensure that NI customers need pay no more than those in any other part of the United Kingdom”.Michael Gove MP