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I have a client who trades as a secondhand car dealer. Most of his purchases are from private individuals in the UK and he accounts for VAT by using the second hand margin scheme; in other words accounting for VAT on the profit margin.
On occasions he imports vehicles from other EU countries and never pays VAT on these vehicles because he buys them from other dealers and gives them his UK VAT number. He then accounts for VAT on the profit margin again when he sells them on in the UK.
However I have a feeling this is wrong because some of the purchase invoices from the EU suppliers refer to a ’margin scheme’ but this is not the case for all of them.
Does he have a problem and how should it be corrected? Readers’ thoughts would be much appreciated.
Query 19 542 – Reliant...
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