The second-hand motor vehicle payment scheme is being introduced on 1 May 2023 and will allow VAT-registered businesses to claim a VAT-related payment if they buy a second-hand vehicle in Great Britain – England, Scotland and Wales – and move it to Northern Ireland for resale.

In the latest Agent Update, HMRC reminds businesses that from 1 May, they will no longer be able to use the VAT margin scheme in such cases when they sell the vehicle. Although VAT will be charged on the full selling price of the vehicle when it is sold, the VAT-related payment puts businesses who buy eligible vehicles from Great Britain, in a similar position to that of the VAT margin scheme.