Brexit: VAT refund scheme plan to solve car import issue

The issues concerned imports from Great Britain no longer being eligible for what is known as the VAT margin scheme

The government has said it intends to introduce a new VAT refund scheme in a bid to solve a Northern Ireland Protocol problem affecting car dealers.

Changes to the VAT treatment of second-hand cars being imported from GB to NI threatened to sharply increase prices.

It concerned imports from GB no longer being eligible for what is known as the VAT margin scheme.

This is the arrangement which allows VAT to be paid on profit from selling goods rather than the full price.

The government says it will introduce a second-hand Motor Vehicle Export Refund Scheme.

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Businesses who buy used vehicles from GB that are removed for resale in Northern Ireland or the EU may be able to claim a refund equivalent to VAT on the price paid.

The government said: "This will put businesses in a similar financial position as if they had continued access to the VAT margin scheme for these second-hand vehicles."

Opinion Poll

Meanwhile, a new opinion poll suggests that support for the protocol has increased in recent months.

Queen's University Belfast in partnership with LucidTalk polling have been running a regular series of polls this year.

Goods arriving into Northern Ireland from the rest of the UK are now subject to checks and control

In their October poll, 52% of respondents agreed that the protocol is on balance "a good thing" for Northern Ireland; that compares with 43% of respondents in June.

The survey was undertaken at the start of October 2021, using the online LucidTalk Northern Ireland Opinion Panel.

The results involve a weighted sample of 2,682 voters across Northern Ireland who take an interest in current affairs and politics, and who are likely to exercise their right to vote.

It suggests that opinion on Brexit and the protocol remains deeply divided and is generally consistent with the previous polls conducted in March and June.

However, the researchers say there have been "some noticeable shifts in opinion" since the summer.

For example, when asked if the protocol provides Northern Ireland with a "unique set of post-Brexit economic opportunities compared to the rest of the UK which if exploited could benefit Northern Ireland" 62% of respondents agreed, compared with 57% in June and 50% in March.

Principal investigator of the project Prof David Phinnemore said: "Majority opinion in Northern Ireland appears to be becoming more accepting and indeed more supportive of the protocol.

"However, many voters remain concerned about the impact Brexit and the protocol are having on Northern Ireland.

"Immediate priority concerns relate to the future availability of medicines and increased paperwork for and restrictions on bringing goods into Northern Ireland from Great Britain."