Purpose of the Report:
This report is designed to identify sales of pre-registered and ex-demonstrator vehicles to ensure the correct treatment of Road Fund Licences (RFLs) and First Registration Fees (FRFs).
Key Risks:
Road Fund Licence (RFL): An RFL can only be treated as a disbursement (and therefore outside the scope of VAT) if the dealer can prove that a full, new RFL has been purchased for the customer. If a pre-registered or ex-demonstrator vehicle is sold with the balance of an existing RFL, it must be treated as a single supply of a taxed vehicle.
First Registration Fee (FRF): The Government's FRF cannot be recharged as a disbursement when selling a pre-registered or ex-demonstrator vehicle. This is because the vehicle has already been registered in the dealer’s name when new.
Important Considerations:
Limited Time Period: Run this report for a specific time period initially, as it will identify all sales of pre-registered and ex-demonstrator vehicles. You can then review individual sales invoices for any incorrect RFL or FRF charges.
Export and Analysis: After running the report, export the data to an Excel spreadsheet. Focus your checks on sales with the shortest time gap between the registration date and the invoice date. You may find it helpful to use an Excel formula to calculate the date differences.
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