The second-hand motor vehicle export refund scheme (the refund scheme) was due to be introduced with effect from 1 October 2022. ICAEW’s Tax Faculty understands that this will now be delayed due to ongoing negotiations between the UK government and the EU about the implementation of the Northern Ireland Protocol.
There is currently no revised start date for the refund scheme but the faculty understands that HMRC’s guidance will be updated in due course to provide a new start date.
The refund scheme will be compulsory for car dealers who buy second-hand vehicles in Great Britain, sell those vehicles in Northern Ireland and currently use the VAT margin scheme for those sales. Once introduced, the refund scheme will allow businesses to claim a refund of VAT instead of using the VAT margin scheme to account for VAT on those sales.
Until the refund scheme is introduced, businesses moving second-hand vehicles from Great Britain to Northern Ireland for resale should continue to use the existing guidance on sales of second-hand motor vehicles in Northern Ireland.
For more information on how the refund scheme is expected to operate, please see HMRC issues VAT export refund scheme guidance
ICAEW Know-How from the Tax Faculty
This guidance is created by the Tax Faculty, recognised internationally as a leading authority and source of expertise on taxation. The Faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.
More support on tax
ICAEW's Tax Faculty provides technical guidance and practical support on tax practice and policy. You can sign up to the Tax Faculty's free enewsletter (TAXwire) which provides weekly updates on developments in tax.Sign up for TAXwireJoin the Tax Faculty
The future of tax after COVID
As digital technologies transform society, the UK government is grappling with balancing the books while ensuring its tax system is fit for purpose. Join us as we take a look at the issues and challenges facing the tax system.Read more
More from the Tax Faculty
Stay up to date with the latest developments in tax by signing up to the Tax Faculty's weekly enewsletter
Comprehensive support for Tax practitioners each month from the Tax Faculty and expert contributors.
Expert advice from the Tax Faculty's technical managers on all the developments in tax policy and practice.