HMRC have announced a new scheme, the second-hand motor vehicle payment scheme due to be introduced on 1 May 2023. It will replace the VAT margin scheme for second-hand vehicles that you buy in Great Britain, move to Northern Ireland and then resell.

Until the new scheme is introduced, you should continue to follow the current guidance on sales of second-hand motor vehicles in Northern Ireland.

The second-hand motor vehicle payment scheme allows you to claim a VAT-related payment on your VAT Return if you:

  • are VAT registered in the UK and have a business establishment in the UK
  • buy an eligible second-hand motor vehicle in Great Britain
  • move that vehicle to Northern Ireland with the intention to resell it in Northern Ireland or to the EU

If you buy second-hand vehicles in Great Britain and move them to Northern Ireland, you will no longer be able to use a margin scheme when you sell them.

If you are VAT registered in the EU, you may also be able to use the payment scheme if you buy second-hand vehicles in Great Britain and export them to the EU for resale.

How the payment scheme works

You can use the scheme to claim a VAT-related payment for any eligible second-hand motor vehicle that you buy in Great Britain and then move to Northern Ireland for resale.

  • You do not have to move the vehicle from Great Britain to Northern Ireland yourself. You can arrange for the seller or another party such as a haulier or carrier to move it to Northern Ireland for you.
  • You must enter details of the vehicle in your stock book. You should also provide other evidence that you intend to sell the vehicle. For example, advertising it for sale or it being on your garage forecourt.
  • You can only use the scheme if your intention is that the first use to which you put the vehicle when you move it to Northern Ireland is to resell it. You cannot use the scheme if you intend to use it within the business or privately, even if you intend to sell the vehicle afterwards.
  • You can use the scheme if you plan to hold the vehicle out for sale but need to do repair or other work on it first. You can also use the scheme if you hold the vehicle out for resale but use it for another purpose (such as a courtesy car) for a short period of time while trying to sell it.

For further information on the second-hand motor vehicle payment scheme please click here.