Second-hand motor vehicle payment scheme

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note provides information on the second-hand motor vehicle payment scheme that applies from 1 May 2023. References to Great Britain in the context of this guidance note should be understood as including the Isle of Man.

The second-hand motor vehicle payment scheme allows businesses to claim a VAT related payment on eligible second-hand motor vehicles that they buy in Great Britain and move to Northern Ireland or the EU after 30 April 2023 with the intention of selling them.

One of the implications of the UK ceasing to be a member of the EU is that, for transactions in second-hand vehicles bought in Great Britain and sold in Northern Ireland, the margin scheme for second-hand motor vehicles is not available from 1 May 2024. Prior to 1 May 2024 the margin scheme for second-hand vehicles is restricted to eligible vehicles held as stock on 1 May 2023 and sold in Northern Ireland before 1 May 2024. This guidance note provides information regarding:

•
why the second-hand motor vehicle payment scheme was introduced

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