With effect from 1 January 2010 the margin scheme for second-hand goods will apply to the supply by taxable dealers of second-hand means of transport and second-hand agricultural machinery purchased or acquired in 2010, rather than the special schemes that currently apply.
In the period from 1 January 2010 to 30 June 2010 transitional measures will be available to taxable dealers in relation to input credit on means of transport and agricultural machinery purchased or acquired on or after 1 January 2010. These transitional measures mean that taxable dealers will be entitled to limited VAT relief on the purchase of these second-hand means of transport or agricultural machinery at a reducing scale of 40% in the period January/February 2010, 30% in the period March/April, and 20% in the period May/June, so as to assist their cash flow position. From 1 July 2010 the new scheme will operate as normal and no VAT input on second-hand means of transport or agricultural machinery will apply from that date.
