UV1 - Qualifying Vehicles

The UV1 - Qualifying Vehicles report is designed to identify VAT-bearing used vehicles where Input VAT has been claimed on the purchase, but the Output VAT declared on the sale is less than the Input VAT. This report helps ensure vehicles are correctly classified and taxed, minimising compliance risks.

Associated Risks

1. Incorrect Margin Scheme Classification:

   • Vehicles with little or no Output VAT may have been incorrectly sold as margin scheme vehicles, which is not permissible for VAT-qualifying vehicles.
   • Action: Review sales records to confirm the correct VAT treatment.

2. Inter-Company Transactions:

   • If the vehicle was transferred between dealerships within the same group, ensure:
     • The importing dealership treats the vehicle as VAT-qualifying when sold.
     • Input VAT is not recovered again, as VAT would have already been claimed during the original acquisition.

Considerations

1. Zero-Rated Sales:

   • Vehicles may be zero-rated due to:
     • Export sales.
     • Disabled adaptations.
   • Action: Refer to NV1 - Liability Issues to ensure proper documentation and compliance for these scenarios.

2. VAT Records:

   • Verify that all VAT-related records for qualifying vehicles are accurate and complete.
   • Check Input VAT claims and Output VAT declarations for discrepancies.

Scenarios Where This Report is Useful

• Identifying VAT-bearing vehicles sold under the incorrect VAT scheme.
• Verifying proper VAT treatment for inter-company transactions.
• Ensuring compliance for vehicles sold under specific conditions (e.g., exports or disabled adaptations).

Key Notes

• VAT Treatment: Ensure vehicles sold as VAT-qualifying are not incorrectly treated under the margin scheme.
• Inter-Company Transactions: Avoid double recovery of Input VAT for vehicles transferred between dealerships.
• Documentation: Maintain detailed records for all VAT-bearing vehicles, especially for zero-rated sales.