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Forecourt CRM

Free tool · Profit calculator

What did that car actually make?

Sold-for minus bought-for is the spreadsheet answer. Put the tyres, the valet, the advert and the VAT on it and see the real one. Free, nothing to sign up for.
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What you spent on itEdit the examples or add your own
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£10 a day is the figure most traders use.

The car, line by line

Sold for
£5,400
Bought for
−£4,000
Spreadsheet profit
£1,400
Tyres
−£180
Valet
−£45
MOT
−£54.85
AutoTrader advert
−£120
Real profit
£1,000.15

Your spreadsheet says £1,400. The car made £1,000.15. That is £399.85 you would not have seen.

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The breakdown above, as one email, so you have it when the car is gone.

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Where the money goes

The margin on a used car leaks in small amounts. Two tyres to get it through the MOT. The valet before the photos. The advert that ran for six weeks. A bulb, a key battery, a tank of fuel for the test drive. None of them is big enough to remember, and together they are the difference between the number on the spreadsheet and the number in the bank.

If you are on the margin scheme, a sixth of whatever is left goes to HMRC — and that is on the gross margin, before any of those costs, which is why a car can look fine on paper and be nearly nothing once the quarter is done.

Forecourt CRM does this sum for every car automatically. Snap the receipt and the cost lands on the right reg; the margin VAT is worked out per car; the profit you see on the dashboard is the real one. See how it works.

Questions

Is this tax advice?
No. It is arithmetic — the same sum a dealer does on the back of an envelope, done properly. Your accountant decides what goes on the VAT return; this just shows you what the car made before you get to that conversation.
How does the margin scheme work?
Under the UK second-hand margin scheme you pay VAT on your margin, not on the full sale price. The VAT inside the margin is 1/6 of it (20% of the net margin, which is 1/6 of the gross). On the car above, the margin is the sold-for price minus the bought-for price, and the VAT line is that figure divided by six. If the margin is negative there is no VAT to pay on that car.
Why not subtract holding cost?
Because nobody sends you a bill for it. Holding cost is what the money tied up in the car could have been doing instead — stock turning, interest saved, another car bought. It is real, and it is why a car that sits for 90 days is a worse deal than the same margin in 20, but it is an opportunity cost rather than a cost you paid out. We show it next to the profit so you can see it, and leave the profit figure as the money that actually arrived.

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Free to use first: the VAT margin scheme, explained