Glossary
VAT margin scheme (used cars)
The VAT margin scheme lets UK dealers account for VAT on the profit margin of an eligible second-hand car rather than its full selling price. A margin-scheme invoice does not show VAT separately; a VAT-qualifying car’s invoice does.
Why it matters operationally
Margin-scheme VAT depends on accurate purchase and sale records for each car, so the scheme rewards dealers who record costs and paperwork consistently. Choosing the wrong treatment on an invoice creates corrections later. This is not tax advice — confirm eligibility and record-keeping rules with your accountant and HMRC guidance.
DealerPilot records margin-scheme or VAT-qualifying treatment on each vehicle and sale, with a dealership default, and the Deal Desk raises the matching invoice.