Why motor dealers deserve more than basic compliance and historic reports

Introduction

Most motor dealers believe their accountant is “doing a good job” because:

• the VAT return is filed
• the year-end accounts are submitted
• HMRC hasn’t been in touch

But here’s the uncomfortable truth:

👉 That doesn’t mean your accountant is helping you run a better, safer, or more profitable business.

At Accounting Matters – Specialist Motor Trade Accountants, we regularly take on dealers who’ve been with the same accountant for years — only to discover they were missing critical insight that could have saved tax, improved margins, or avoided risk.

This blog outlines what your accountant should be telling you if they truly understand the motor industry — and why most don’t.

1️⃣ “This Is Your Real Profit Per Vehicle”

Most accountants will tell you:

“Your business made £X profit this year.”

What they should be telling you is:

• what you made per car
• which vehicles are profitable
• which ones consistently lose money
• how recon, finance and stock days affect margin

Without this, dealers are guessing.

We regularly find:

• recon costs not allocated to vehicles
• finance interest hidden in overheads
• discounts not tracked properly
• warranties and add-ons ignored in margin

If your accountant can’t clearly explain profit per unit, they’re not giving you the insight you need.

2️⃣ “Your VAT Margin Scheme Is Exposed Here”

Many accountants “know about” the VAT Margin Scheme.

Very few understand how it works day-to-day in a dealership.

What your accountant should be flagging:

• margin inconsistencies
• missing purchase evidence
• stock book mismatches
• private vs trade purchase errors
• recon being wrongly included
• overpaid VAT opportunities

Instead, many simply submit the VAT return and move on.

At Accounting Matters, we review margin VAT quarterly — because that’s where most HMRC problems begin.

3️⃣ “This Is Why Your Cashflow Feels Tight”

A common dealer frustration:

“We’re busy — but the bank balance doesn’t reflect it.”

Your accountant should be explaining:

• when finance payouts actually land
• how stocking interest affects cash
• why VAT quarters cause pinch points
• how recon timing drains cash
• which months need planning

Instead, most accountants only explain cashflow after the problem has happened.

We believe cashflow should be predicted — not post-mortemed.

4️⃣ “You’re Overpaying Tax — And Here’s Why”

Tax planning for motor dealers doesn’t happen at year-end — it happens before.

Your accountant should be discussing:

• salary vs dividend mix
• timing of capital purchases
• pension contributions
• Month-9 planning
• stock valuation adjustments
• director loan risks

If you only find out your tax bill once the year is finished, the opportunity to reduce it has already gone.

5️⃣ “These Numbers Suggest a Problem Is Coming”

Good accountants don’t just report — they interpret.

They should be warning you about:

⚠ margins drifting down
⚠ recon costs rising
⚠ stock holding days increasing
⚠ VAT becoming unpredictable
⚠ finance reconciliation delays
⚠ inconsistencies between sales and cash

These are early warning signs.

Most accountants don’t look for them — or don’t know what they mean in a motor trade context.

6️⃣ “Your Records Wouldn’t Stand Up to an HMRC Review”

Many dealers assume:

“If HMRC haven’t contacted us, everything must be fine.”

Not true.

Your accountant should be honest about:

• gaps in purchase documentation
• incomplete stock books
• weak audit trails
• margin scheme vulnerabilities
• personal vs business mixing

At Accounting Matters, we build HMRC-ready systems, not panic responses.

7️⃣ “You’ve Outgrown Once-a-Year Accounting”

Once your dealership grows — especially past £250k turnover or into a limited company — annual accounts are not enough.

Your accountant should be recommending:

• quarterly management accounts
• cashflow forecasting
• margin analysis
• regular review meetings
• proactive planning

If you’re only reviewing numbers once a year, you’re always reacting instead of leading.

Why Most Accountants Don’t Say These Things

Not because they don’t care — but because:

• they don’t specialise in the motor industry
• they focus on compliance, not performance
• they lack systems for real-time insight
• they don’t understand margin VAT deeply
• they aren’t set up for proactive work

Motor dealers need specialists — not generalists.

Why Accounting Matters Is Different

At Accounting Matters, we don’t just file returns.

We help motor dealers understand, control, and improve their business.

We provide:

✔ specialist motor trade knowledge
✔ VAT margin expertise
✔ quarterly management accounts
✔ profit-per-vehicle reporting
✔ recon and stock analysis
✔ cashflow forecasting
✔ Month-9 tax planning
✔ HMRC-ready compliance
✔ digital systems that work

We tell you what you need to hear — not just what’s easy to say.

Real Example: The Conversation Their Old Accountant Never Had

A motor dealer came to us saying:

“My accountant never flagged any issues — but I always felt unsure.”

Within the first review, we identified:

• overpaid VAT
• recon costs hiding margin loss
• stock sitting too long
• unnecessary tax exposure

None of it was dramatic — but all of it was costly.

Once corrected:

✔ VAT reclaimed
✔ margins improved
✔ cashflow stabilised
✔ confidence restored

All because the right conversations finally happened.

⚠ Ask Yourself This One Question ⚠

Is your accountant:

• explaining why your numbers look the way they do?
• highlighting risks before they become problems?
• helping you plan — not just report?

If not, you’re not getting what your business needs.

Contact Accounting Matters – Specialist Motor Trade Accountants

📍 Accounting Matters – Specialist Motor Trade Accountants
📞 01773 747 990
📧 welcome@accountingmatters.co.uk
🌐https://www.accountingmatters.co.uk/specialist-accountancy-for-motor-dealers

You sell the cars.

We’ll make sure the numbers work for you — not against you.