Guidance

Sales of second-hand motor vehicles in Northern Ireland

Find out about using the VAT margin scheme if you're a dealer who sells second-hand motor vehicles in Northern Ireland that have come from Great Britain.

The second-hand motor vehicle export refund scheme is a new scheme that the government intends to introduce on 1 October 2022. 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 guidance on this page.

Find out what you can do to prepare for the scheme. More detailed guidance will be published as soon as we able to.

About the VAT margin scheme

If you’re a dealer who sells motor vehicles in Northern Ireland which you bought in Great Britain, Northern Ireland or the EU, you can benefit from the VAT second-hand margin scheme. This is subject to the rules of the scheme.

This means if a Northern Ireland car dealer has bought a used car in Great Britain they’ll be able to account for VAT on the margin. The margin is the difference between the purchase price and the sale price.

If you buy a motor vehicle in Great Britain and transfer it to your dealership in Northern Ireland before you sell it, you’ll need to account for VAT on this movement. You would account for this as a movement of your own goods.

You’ll be able to reclaim this import VAT as input tax on your VAT Return, when the vehicle is being used as stock for your taxable sales.

Find out more about the margin scheme for second-hand cars and other vehicles.

Vehicles you’ve sold from 1 January 2021

As a Northern Ireland dealer, you may have bought a used motor vehicle in Great Britain after the end of the transition period and sold it in Northern Ireland with VAT charged at the full selling price.

This vehicle would be eligible for the margin scheme, so the value can be adjusted where the additional VAT has been paid back to the customer.

Published 14 January 2021
Last updated 25 March 2022 + show all updates
  1. Information has been added about the new second-hand motor vehicle export refund scheme that the government intends to introduce in October 2022.

  2. Information explaining this guidance may soon change due to recent announcements at the Autumn Budget 2021 has been added. Until then, the current guidance should still be followed.

  3. First published.