New Vehicle Stock Book:-
· NV1 Liability issues – identify new vehicles where the VAT accounted for on sale is either very low or nil
· NV2 Value Manipulation (Negative Equity) – identify all deals where customer has negative, or no equity in their part exchange
· NV3 Invoicing – Tax Points – identify deals where the “14 days” rule for tax points may have been exceeded, and vehicles invoiced in the current VAT period should have been accounted for in the previous period
Used Vehicle Stock Book:-
· UV1 Qualifying Vehicles – identify VAT-bearing used vehicles where Input VAT has been claimed on the purchase but the Output Tax declared on the sale is less than this
· UV2 Commercial Vehicles – identify all used vehicles where the dealership has recovered VAT on the purchase, including commercials which may have been taken in part-exchange.
· UV3 Qualifying Vehicle Transfers – identify the qualifying vehicles (including demonstrators) acquired from other dealerships with the same VAT registration
· UV 4 Value Manipulation (Negative Equity) – identify all deals where the customer has negative, or no equity in their part-exchange
· UV5 Margin VAT Verification – verify the calculation of margin scheme VAT and identify possible liability/VAT coding errors
· UV 6 Margin VAT Liability – identify possible liability/VAT coding errors with sales on non-qualifying (margin scheme) vehicles
· UV 7 Used Vehicle Mileage Query – identify used vehicles with low mileage to confirm correctly eligible for sale under the margin scheme
· UV 8 Pre-Registered Vehicles (RFLs and FRFs) – identify the sales of pre-registered and ex-demonstrator vehicles, in order to check for incorrect treatment of RFLs and FRFS
· UV 9 – Invoicing – Tax Points – identify deals where the “14 days” rule for tax points may have been exceeded, and vehicles invoiced in the current VAT period should have been accounted for in the previous period
· UV 10 Government Scrappage Scheme – identify vehicles which may have been acquired as part of a deal involving the government scrappage scheme , and thus to check the sale of the related new vehicle was correctly accounted for
Purchase Ledger Queries:-
· PL1 Late Posted Credit Notes – identify all purchase credit notes where the document date is before the end of the most recent VAT period but the posting was not made until after this date
· PL 2 Input Tax on New Vehicles – identify Vat claimed on new vehicles within a specified period
· PL3 Non-vehicle related High Input VAT – identify the high Input VAT claims not in respect of vehicle purchases
Sales Ledger Queries:-
For Sales Ledger tests HMRC recommend the use of the “drill-down” facility with the VAT
Reconciliation Summary to identify Outputs coded to specific VAT codes
Nominal Ledger Queries:-
NL 1 Identifying Costs Posted to Nominal Ledger Code – identify possible non deductibles or costs posted to certain nominal codes