Explanatory note

This Order, which comes into force on 3rd July 1997, amends the Value Added Tax (Cars) Order 1992 (S.I. 1992/3122) (“the principal Order”) as amended by the Value Added Tax (Cars) (Amendment) Order 1995 (S.I. 1995/1269) and the Value Added Tax (Cars) (Amendment) (No. 2) Order 1995 (S.I. 1995/1667).

Articles 3 and 4 amend article 8 of the principal Order which specifies the circumstances in which a taxable person may opt to account for VAT on the sale of a used motor car on the profit margin (“the margin scheme”) as opposed to the full sale value of the car. Article 3 removes from the qualifying circumstances cars obtained by the taxable person upon the transfer of a going concern (“TOGC”) of a business, or part of a business. Article 4 however preserves the right of the transferee to use the margin scheme for cars obtained under a TOGC if the transferor was qualified to sell them under the margin scheme.