UV5 - Margin VAT Verification

Purpose of the Report:

This report is designed to verify the calculation of margin scheme VAT and to identify any potential liability or VAT coding errors. Vehicles showing a positive margin but with a Margin VAT of "0" may have been zero-rated due to a disabled adaptation, export, inter-company transfer, or simply due to incorrect VAT coding by the sales administrator.

Key Risks to Consider:

• Incorrect VAT Coding: Ensure that the correct VAT code was used when the vehicle was sold.

• Hire Purchase Vehicles: Remember that vehicles sold on Hire Purchase are supplied to the finance company and should not be zero-rated for VAT.

• Export Documentation: Do you have the necessary evidence that the vehicle has been exported?

• Disabled Adaptations: If a vehicle has been specifically and permanently adapted for a disabled person, verify that you have a completed and signed certificate from the disabled person. Confirm that the vehicle is supplied for their personal use, as supplies to businesses cannot be zero-rated.

• Margin Adjustments: The margin may have been incorrectly adjusted due to profits made when vehicles were transferred to or from other dealerships within the same VAT registration number.

• VAT Rate Changes: By comparing the "VAT Rate" field with the invoice date, you can verify that the correct standard VAT rate was applied to the margin during the relevant periods:

  • Up 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%