UV5 Report: Margin VAT Verification and Compliance

Modified on Mon, 8 Dec at 2:53 PM

Report Purpose

The UV5 Report is your primary tool for verifying the accuracy of VAT Margin Scheme calculations and identifying potential VAT coding errors or undeclared liabilities.

The report highlights vehicles showing a positive margin but a Margin VAT of "0". These transactions need immediate investigation, as they may be zero-rated due to:

A disabled adaptation.
Export sale.
Inter-company transfer.
Incorrect VAT coding by the sales administrator (the most common risk).

Critical Compliance Risks to Investigate

Review these key areas to confirm the zero-rating or calculation is correct:

Risk Area	Compliance Check
Incorrect VAT Coding	Did the sales administrator use the correct VAT code when the vehicle was sold?
Hire Purchase (HP) Sales	HP vehicles are supplied to the finance company and should not be zero-rated for VAT. Ensure correct VAT is applied.
Export Documentation	Do you have all necessary evidence (proof of shipment, etc.) that the vehicle was legally exported outside the UK?
Disabled Adaptations	Permanent adaptations may allow zero-rating. Verify that you have a completed, signed certificate from the disabled person. Confirm the supply is for personal use; supplies to businesses cannot be zero-rated.
Margin Adjustments	Has the margin been incorrectly adjusted due to profits or losses made during vehicle transfers between dealerships under the same VAT registration number?

Verifying Historic VAT Rates

Use the UV5 report to compare the "VAT Rate" field against the invoice date to ensure the correct standard rate was applied to the margin.

Invoice Date Range	Applicable Standard VAT Rate
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%