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Brexit Used Car Margin Scheme Implications For Car Dealers In Northern Ireland

31st December 2020

Dealer Management System and website provider Dragon2000 has detailed below some of the implications of Brexit for used car dealers, particularly concerning those based in Northern Ireland.

From 1 January 2021, there is an important change to second-hand Margin Scheme rules that car dealers in Northern Ireland should be aware of.

The HMRC policy paper on VAT on the movement of goods between Northern Ireland and Great Britain, updated in December, states that in line with EU rules, margin schemes involving goods, such as the second-hand margin schemes, will not usually apply for sales in Northern Ireland where the stock is purchased in Great Britain.

The VAT on these sales will be subject to the normal rules and must be accounted for on the full value of the supply – so effectively must be treated as VAT qualifying vehicle sales.

The Margin Scheme is still available for sales of used vehicles that are purchased in Northern Ireland or the EU, whether sold to customers in Northern Ireland, Great Britain or the EU.

Used Car Margin Scheme Implications For Car Dealers In Northern Ireland

In the government’s Northern Ireland Protocol paper, also recently updated, it is confirmed that currently these changes will not affect stock already purchased from Great Britain prior to 1 January 2021, even if the vehicle is sold after this date.

However it states that they “acknowledge that this is not a longer-lasting solution to the issue. The Government is aiming to minimise disruption for Northern Ireland traders to the extent possible and is continuing to explore options for addressing the impacts.”

The Margin Scheme will still remain available for car dealers in Great Britain selling stock originally purchased in Northern Ireland or Great Britain.


UPDATE: There has been an announcement by the government since this article was published – click here to read the latest news.



If you’re interested in our dealer management system, car dealer websites or mobile apps, please contact our sales team on 01327 222 333 or email sales@dragon2000.co.uk for more information.

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