Used car buyers in Northern Ireland are at risk of price rises due to Brexit – and potentially a reduced supply of second-hand cars, too.
Retailers report that changes to how VAT is calculated on cars imported from Great Britain mean prices may have to go up.
Previously, retailers paid VAT only on the profit margin of the car.
However, Brexit means Northern Ireland businesses are no longer part of the UK’s margin scheme on second-hand goods.
This means VAT has to be paid on the full sale price of the used car.
Trade title Auto Retail Agenda also adds that an increase in red tape might also restrict the supply of cars from Great Britain to Northern Ireland.
That’s because UK suppliers might be deterred by the extra paperwork involved.
One car dealer is reported as calling it “total discrimination… we are not on a level playing field with Great Britain”.
Both governments are reportedly aware of the problem and, as part of the Northern Ireland Protocol, Westminster is “continuing to explore options for addressing the impacts”.
Around 270,000 used cars are sold in Northern Ireland each year, and many of them are imported into the country from Great Britain.
“If we can’t get cars, or there is 20 percent VAT, then that’s it – we’re finished,” said County Down used car dealer Ciaran Russell.
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