How to post a VAT reclaim under the Second-Hand Motor Vehicle Payment Scheme
From Catalyst
Summary
This article explains how to post a VAT reclaim under the Second-Hand Motor Vehicle Payment Scheme.
For more information please refer to HMRC Guidance or consult your accountant for advice.
More Information
The Second-Hand Motor Vehicle Payment Scheme allows you to claim a VAT-related payment if you buy an eligible second-hand motor vehicle in Great Britain and;
- Move that vehicle to Northern Ireland with the intention to resell it in Northern Ireland or to the EU.
- Export that vehicle to the EU with the intention to resell it in the EU or to Northern Ireland.
This applies to customers in Northern Ireland or groups with branches in the ROI/UK.
To sell a second hand vehicle with full VAT you must ensure you amend the unit record:
- Edit the Unit record and set the "VAT Qualifying" flag to 'Y'
 | To ensure VAT is correctly applied you must make the above change prior to raising the Unit sales Order or Invoice. |
Posting the Reclaim
You must calculate the value of the reclaim.
Please seek advice from HMRC or your accountant if you are unsure of the calculations to use.
Go to " Nominal Ledger Journal Entries".
- Select [Multiple] at "Entry mode".
- Enter a date within the V.A.T. quarter for which you are making the entry.
- Enter a suitable centre e.g. Unit COS and press <Enter>.
- In the "Credit" column enter the amount to reclaim and press <Enter>.
- Enter a suitable comment and press <Enter>.
- On the next line enter the same centre as above and move across to the "Comment" field, leaving the Debit & Credit columns at 0.00
- Press <F6> to repeat the previous comment.
- Select [Input] from the "V.A.T Indicator" drop down.
- Select [1 - Vat Rate 1] from the "V.A.T. Rate" drop down box.
- Move to the "VAT Amount" and enter the amount to reclaim.
- The effect of the above is a Credit to the Profit & Loss for the VAT reclaim, so reducing costs, and the VAT itself posted through the VAT Return to be reclaimed.
- Click [Done]and [Accept] the journal.
See also
