The government published guidance in January and has engaged with the motor industry to help prepare for the changes. HMRC has contacted impacted businesses to remind them about the action they may need to take before 31 October 2023.
VAT margin scheme
If businesses have second-hand motor vehicles in stock that they bought in GB and moved to NI before 1 May 2023, they can continue to use the VAT margin scheme if those vehicles are sold by 31 October 2023.
If they are sold after 31 October 2023, the business will have to account for VAT on the full selling price of the vehicles.
Second-hand motor vehicle payment scheme
The new second-hand motor vehicle payment scheme was introduced on 1 May 2023.
If businesses bought second-hand vehicles in GB and moved them to NI on or after 1 May 2023 for resale, they may be eligible for a VAT-related payment under the new scheme. This scheme has replaced the VAT margin scheme in such cases. Although VAT will be charged on the full selling price of the vehicle when it is sold, this payment will ensure that businesses selling in NI will pay the same net amount of VAT as if they had continued access to the VAT margin scheme for these vehicles.
More information
Find out more about how to claim a VAT-related payment if you buy second-hand motor vehicles in Great Britain and move them to Northern Ireland for resale.
Find out more about motor vehicles you had in stock on 1 May 2023.