UV7 - Used Vehicle Mileage Query

The UV7 - Used Vehicle Mileage Query report is designed to identify used vehicles with low mileage to ensure they are correctly classified for sale under the margin scheme. This helps verify compliance with VAT rules and protects against errors in tax reporting.

Key Risks

1. Incorrect Margin Scheme Classification:

   • Low-mileage used vehicles may be VAT qualifying but incorrectly recorded as margin scheme sales.
   • Action: Review the purchase invoice details—if VAT is charged on the invoice, the vehicle cannot be sold under the margin scheme, even if input tax is not reclaimed.

2. Suspicious Supplier Activity:

   • Repeated purchases of low-mileage used vehicles from the same supplier could indicate:
     • Vehicles were imported with no VAT paid.
     • Vehicles were incorrectly supplied zero-rated for VAT to a UK business.
   • Action: Investigate supplier practices and ensure compliance.

Considerations

1. Mileage Field Accuracy:

   • The report relies on the mileage field being correctly completed by the dealership. Ensure accurate data entry.

2. Mileage Threshold:

   • The default query uses a threshold of 500 miles or less to flag vehicles for review.
   • This threshold can be adjusted to suit specific dealership policies or requirements.

Scenarios Where This Report is Useful

• Identifying VAT qualifying vehicles incorrectly classified under the margin scheme.
• Monitoring suppliers for potential VAT compliance issues with low-mileage vehicles.
• Ensuring accurate classification of vehicles to avoid penalties or tax errors.