UV3 - Qualifying Vehicle Transfers

The UV3 - Qualifying Vehicle Transfers report is designed to identify qualifying vehicles (including demonstrators) that have been acquired from other dealerships within the same VAT registration. The report flags cases where the VAT declared on the onward sale is either nil or unusually low (e.g., less than £250). This helps ensure compliance with VAT rules and proper treatment of qualifying vehicles.

Associated Risks

1. Loss of Qualifying Status:

   • Vehicles may lose their qualifying status but still be incorrectly sold as margin scheme (non-qualifying) vehicles.
   • Action: Verify that vehicles are correctly classified and taxed.

2. Incorrect Input Tax Recovery:

   • Input tax may have been incorrectly recovered by more than one dealership within the same VAT registration.
   • Action: Check the VAT recovery history for the vehicle to prevent duplication.

Considerations

1. Zero-Rated Sales:

   • The vehicle may have been zero-rated due to:
     • Export or EC sales.
     • Adapted vehicle sales to wheelchair users.
   • Action: Ensure appropriate evidence is available, such as documentation outlined in NV1 - Liability Issues.

2. Intra-Dealership Transfers:

   • Vehicles transferred within the same VAT registration are outside the scope of VAT.
   • Action: Verify the VAT treatment of the final sale to the customer, as this determines compliance.

3. Input VAT Treatment:

   • The Input VAT field should always be nil for qualifying vehicles transferred within the dealership. This is because VAT would have already been recovered when the vehicle was initially purchased.

Scenarios Where This Report is Useful

• Identifying qualifying vehicles sold with incorrect VAT treatment.
• Ensuring proper input VAT recovery across dealerships within the same VAT registration.
• Reviewing VAT compliance for demonstrators and intra-dealership transfers.

Key Notes

• VAT Recovery Evidence: Ensure all sales, particularly zero-rated ones, have supporting documentation.
• Final Sale VAT Treatment: The VAT status of the final customer sale should be thoroughly reviewed to avoid errors.
• Monitor Low VAT Declared: Sales with unusually low or nil VAT declarations should be flagged for further investigation.