Purpose of Report:
To verify the calculation of margin scheme VAT and identify possible liability/VAT coding errors.Vehicles showing a positive margin but with a Margin VAT of "0" may have been zero-rated as a disabled adaption or export, transferred inter-company, or simply given an incorrect VAT coding by the sales administrator.
Associated Risks:
•Incorrect VAT coding used when vehicle sold.
•Vehicles supplied on Hire Purchase are supplied to finance company and are not zero-rated for VAT.
•Do you have evidence that the vehicle has been exported?
•Has the vehicle been specifically and permanently adapted for a disabled person? Do you have a completed certificate signed by the disabled person? Are you satisfied that the vehicle is supplied for the personal use of the disabled person? Note - supplies to businesses cannot be zero-rated.
•The ultimate margin may have been incorrectly inflated/deflated by profits made when the vehicles transferred to/from other dealerships within the same VAT registration number.
•Comparing the "VAT Rate" field with the invoice date, you will also be able to confirm that the changes to the standard of VAT applied to the margin were correctly implemented:
Dates: Standard Rate ("VAT RATE")
To 30/11/2008 17.5%
01/12/2008 to 31/12/2009 15.0%
01/01/2010 to 03/01/2011 17.5%
From 04/01/2011 20.0%
