Vintro Pro
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Vintro Pro
NL · FR · EN
Means of transport are named separately in the scheme. For motorcycles the snag usually comes from the workshop or from across the border.
Used motorcycles fall under the margin scheme.
Used motorcycles fall under the margin scheme. In the UK they are excluded from global accounting, so each bike needs its own margin; on sales into the EU the new-vehicle rule cuts across.
In the UK a motorcycle is not a motor car — article 2 of the Value Added Tax (Special Provisions) Order 1995 defines a motor car as having three or more wheels — so it is ordinary second-hand goods under that Order. But article 13(2) shuts motor vehicles out of global accounting, and HMRC’s manual says so for motorcycles in as many words (VATMARG03100). Belgium’s FPS Finance names second-hand means of transport, motorcycles included, separately.
Two things make it harder in practice: the line between repairing and rebuilding, and, on sales into the EU, the new-means-of-transport rule.
A motorcycle bought from a private individual, fixed up and resold is second-hand goods usable again after repair. That is exactly the definition in article 2 of the 1995 Order.
Buy from a dealer with VAT on the invoice and it is an ordinary purchase with deduction. That choice is made at purchase, not at sale.
Article 2 of the Value Added Tax (Special Provisions) Order 1995 defines second-hand goods as “tangible movable property that is suitable for further use as it is or after repair, other than motor cars, works of art, collectors’ items or antiques and other than precious metals and precious stones”. Article 12(2) opens the margin scheme to “works of art, antiques and collectors’ items” and “second-hand goods”.
That is the whole test, and it is a test about the goods, not about your trade. The power to charge VAT on the profit margin sits in section 50A of the VAT Act 1994, which also names motor vehicles separately. Article 12(3) of the 1995 Order adds the purchase side: you must have taken possession of the goods on a supply on which no VAT was chargeable, or on another margin-scheme sale. gov.uk (VAT margin schemes) puts it plainly: you cannot use a margin scheme for “any item you bought for which you were charged VAT”. Belgium, which follows the EU VAT Directive, keeps its own exclusion list: FPS Finance names new goods, precious metals, precious stones and pearls, renovated goods, goods consumed on first use and goods that cannot be used again in the same state, under article 58, § 4 of the Belgian VAT Code and Royal Decree no. 53 of 23 December 1994. The four-country panel below shows where that changes the answer.
The example is a used motorcycle: bought for €2,400.00, sold for €3,600.00. Put your own figures in.
Sold at a loss: no margin on this item, so no VAT. In the UK you work item by item: the loss counts as zero and gives you nothing back.
The VAT is inside the margin, not on top of it. That is the mistake this calculator is built to prevent: 20% on this example’s margin of 1,200 is 240.00, while in the UK you owe one-sixth, 200.00 — the 16.67% gov.uk quotes. At Belgium’s 21%, the same mistake turns €208.26 into €252.00. How to do this across a whole return period — and why France calculates piece by piece by law — is set out in How do you calculate margin VAT?
A motorcycle built up from two or three wrecks is no longer the goods you bought. gov.uk’s guidance on second-hand vehicles allows a rebuilt vehicle in the scheme only if you built it from used vehicles bought under the margin scheme and it does not need re-registering with the DVLA; with a new registration number, VAT is due on the full price. The same guidance excludes category A and B write-offs. Belgium excludes goods processed so heavily that they can no longer be identified, and goods that can no longer be used in the same state.
On a supply to a buyer in an EU member state the new-means-of-transport rule joins in: under article 2(2) of the EU VAT Directive 2006/112/EC, a motorised land vehicle of more than 48 cc or 7.2 kW counts as new if it is supplied within six months of first entry into service or has travelled no more than 6,000 kilometres, whatever the advert says. Such a supply is exempt in the member state where the transport starts, and VAT is due in the buyer’s member state (Directive 2006/112/EC, articles 138(2)(a) and 2(1)(b)(ii)).
In the UK, whether motorcycles fall under the scheme is a matter of UK law: HMRC runs its own margin schemes under section 50A of the VAT Act 1994. Belgium, the Netherlands and France all follow the same EU VAT Directive (2006/112/EC). Each country interprets the rules itself; where that makes a difference for motorcycles, this page says so. The rate and the calculation method always differ.
Margin across the whole return period. Article 58, § 4 VAT Code and RD no. 53.
Per period by default (global accounting, Uitvoeringsbesluit OB 1968, art. 4c(1)). You can opt out in writing to the inspector, for at least five years.
Legally piece by piece, but globalisation per period is allowed, with no prior election. CGI art. 297 A; BOFiP § 260.
HMRC’s own scheme, outside the EU. Below the registration threshold you pay nothing.
A motorcycle over 48 cc or 7.2 kW within six months of first entry into service or up to 6,000 kilometres counts as new on a supply to another member state: exempt in the seller’s member state, taxed in the buyer’s (Directive 2006/112/EC, articles 2(2), 138(2)(a)).
The margin is selling price minus purchase price. New parts lower your profit, not your margin.
In the UK a bike that needs a new DVLA registration number cannot go under the margin scheme (gov.uk). What comes into being from loose parts is not the goods you bought.
A margin invoice carries no VAT amount. On amounts of thousands of euros that is not a detail.
This is an explanation, not tax advice. Whether the margin scheme is the right choice in your case, and how to enter it in your return, is a question for your accountant.
Yes. In the UK a motorcycle is second-hand goods under article 2 of the Value Added Tax (Special Provisions) Order 1995, since only vehicles with three or more wheels count as motor cars there, and article 12(2) opens the margin scheme to it. It cannot go under global accounting (article 13(2); VATMARG03100). Belgium's FPS Finance names second-hand means of transport, motorcycles included.
Yes. The definition of second-hand goods itself speaks of goods suitable for further use as they are or after repair, and the repair costs stay out of the margin (gov.uk). A bike rebuilt from parts that needs a new DVLA registration number falls outside.
The European new-means-of-transport rule joins in: a motorcycle of more than 48 cc or 7.2 kW counts as new if it is supplied within six months of first entry into service or has travelled no more than 6,000 kilometres (Directive 2006/112/EC, article 2(2)). Such a supply is exempt in the member state where the transport starts, and VAT is due in the buyer’s member state (Directive 2006/112/EC, articles 138(2)(a) and 2(1)(b)(ii)). Check it before you invoice.
In the UK, at 20%, the VAT is one-sixth of the margin: €1,200 ÷ 6 = €200.00 (in pounds the sum works the same way). In Belgium, at 21%, €208.26 (€1,200 × 21/121).
The same question, a different kind of piece. The answer differs more often than you would expect.
Every piece gets its own purchase price, selling price and scheme. Vintro Pro keeps margin goods separate from the rest and works out your margin per return period.
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