Accounting services
Motor trade business health check
Motor Trade Accounting helps garages, dealers and motor businesses across the UK arrange a thorough health check of their accounts, tax and systems. If something about your numbers does not feel right, a review is the place to start.
A full service for your finances
Most motor trade owners have a nagging feeling at some point that something is not quite right. The profit on paper does not match the money in the bank. The VAT bill seems high for the number of cars sold. The books are always behind, or nobody can explain the director's loan account. A business health check is a structured review designed to find out why, before a small problem turns into an expensive one.
The review looks at the areas where motor businesses most often go wrong. That includes whether the VAT Margin Scheme is being used correctly and the stock book supports it, whether purchases and sales are coded properly, whether payroll and benefits such as company vehicles are being treated correctly, and whether the director's loan account and dividends are in order. It also looks at the systems behind the figures: how workshop jobs, parts and vehicle sales find their way into the books.
The outcome is a plain-English report setting out what is working, what needs fixing and what the priorities are. Where errors are found, a specialist motor trade accountant explains the options, which may include correcting past returns or making a disclosure to HMRC. Where opportunities are found, such as reliefs or allowances not being claimed, those are set out too.
What a health check can cover
The scope is agreed with you, and can be focused on one area or cover the whole business.
- VAT scheme reviewChecking that margin scheme and standard-rated sales are separated correctly and that input VAT on vehicles is only claimed where it is allowed.
- Stock book and recordsTesting a sample of vehicle sales against purchase and sales invoices and the stock book, as HMRC would on an inspection.
- Bookkeeping and codingLooking for misposted transactions, unreconciled accounts and suspense balances that distort your profit.
- Director's loan account and dividendsMaking sure withdrawals, dividends and personal spending are recorded correctly and do not create unexpected tax charges.
- Payroll and benefitsChecking employment status, payroll submissions and the treatment of company cars, vans and fuel.
- Allowances and reliefsReviewing whether capital allowances on equipment and other reliefs are being claimed properly.
- Systems and controlsAssessing how information flows from the workshop or showroom to the accounts, and where it could be simpler or safer.
What to plan before a health check
A review runs faster and finds more when the right information is ready.
Recent returns and accounts
Have your last few VAT returns, the latest year-end accounts and tax returns to hand, along with any HMRC correspondence.
Access to your records
Read-only access to your accounting software and bank feeds lets a reviewer test transactions directly.
Your concerns
Note the things that worry you, such as a VAT figure that seems wrong or a balance nobody can explain. They help focus the review.
Key people
Make sure whoever keeps the books and runs the stock records is available to answer questions during the review.
Good to know about health checks
Finding errors early is better
HMRC generally treats mistakes that you find and correct yourself more favourably than ones it discovers during an inspection.
Past VAT errors can often be corrected
Smaller VAT errors can usually be corrected on a later return, while larger ones need to be reported to HMRC separately. Check HMRC's current error correction rules.
A review is not an audit
A health check is a practical review for your benefit. It is not a statutory audit and does not give a formal opinion on your accounts.
It is useful before big decisions
Selling the business, bringing in a partner or changing accountant are all good moments for a health check.
How it works
- 1
Tell us what is worrying you
Send an enquiry describing your business and what prompted you to look for a review.
- 2
Agree the scope
A specialist motor trade accountant discusses your concerns and agrees what the review will cover.
- 3
Carry out the review
Records, returns and systems are examined, with questions raised as they come up.
- 4
Report and next steps
You receive a plain-English summary of findings, priorities and options, with time to discuss it.
Questions about business health checks
What usually prompts a health check?
Common triggers are a VAT bill that seems wrong, an unexpected tax charge, books that are always behind or a feeling that profit does not match cash.
Will HMRC be told about the review?
No. The review is for you. If it finds errors, your accountant will explain whether and how they need to be corrected or disclosed.
Can the review focus on the VAT Margin Scheme only?
Yes. The scope can be as narrow as one VAT scheme or as wide as the whole business.
Do I have to change accountant to get a review?
No. A health check can be carried out independently, and the findings can be shared with whoever looks after your accounts.
What happens if errors are found?
You are shown what went wrong, what it might cost and the options for putting it right, including how to stop it happening again.
Who carries out the review?
Your enquiry goes to a qualified accountant who works with motor trade businesses and knows where the common problems lie.
Find out what is really going on in your numbers
Tell us what is worrying you and a specialist motor trade accountant will talk you through what a health check could cover.