You need to be aware of the VAT implications for the margin scheme for buying and selling used cars. read up ALL the VAT notices – the notes below are only a guidance.
New cars include VAT on all accessories as well as the car itself. There is no VAT chargeable on finance charges, road fund licenses or grants towards electric cars.
Second hand cars purchased include VAT – irrespective of whether you raise a VAT invoice or not. The costs of refurbishing, repairing, valeting etc are not to be included in the costs. You can, however, reclaim VAT back on purchases of spares at the time of purchase .
Second hand cars are to be held in a book stock. The Prelude product system will allow this but there will ever be only one transaction in and out.
The sales of the vehicles will be included in the VAT return as sales and output tax and the part exchanges and purchases of second hand cars as an offset of sales and input tax. – see FAQ – VAT Margin Scheme.
Feel free to contact Prelude Software Ltd for guidance on how to operate the scheme within the software.