How to Change the VAT Status of a Stock Vehicle

Changing the VAT status is a high-risk action that determines the accounting method for the vehicle's sale. This must be done before the sales process begins.

Step 1: Check for Restrictions

Before proceeding, you must ensure that:

• No sales invoice has been issued.

• The vehicle has not been adopted.

If either of these conditions is met, the VAT status is locked and cannot be amended.

Step 2: Access and Amend Status

1. Access Record: Navigate to the stock record of the vehicle in question.

2. Open Tab: Select the Purchase Status tab.

3. Amend Status: Use the dropdown menu to select the appropriate VAT status.

Definition of VAT Statuses

Choose the correct option based on the vehicle's purchase terms:

• Qualifying VAT Status

  • Definition: Applies a standard 20% VAT charge on the entire selling price of the vehicle.

  • Use: Typically used for new vehicles or vehicles where VAT has been reclaimed on purchase.

• Margin VAT Status

  • Definition: Calculates the VAT based only on the profit margin (selling price minus purchase price) of the vehicle.

  • Use: Typically used for eligible used vehicles where VAT was not reclaimed on purchase.