VAT rules have edge cases and change over time. This guide explains the common situations in plain English so you know what to ask — but always confirm your own position with your accountant or HMRC before you set a price or raise an invoice.
Few things confuse a van sale more than VAT — and getting it wrong makes your advert look mispriced and can land you with a tax headache. The good news is that for most sellers the answer falls into one of two clear buckets. Here's how to work out which is yours.
Why Vans and VAT Are Different from Cars
Vans are commercial vehicles, so VAT-registered businesses can usually reclaim the VAT when they buy one (you generally can't on a car). That single fact ripples through the whole used market: vans that had their VAT reclaimed are later resold plus VAT, and buyers are used to seeing prices quoted that way. It's why 'is that plus VAT?' is the first question you'll be asked.
The Two Common Situations
1. A VAT-Qualifying Van (sold plus VAT)
If the VAT was reclaimed when the van was bought — typical for a VAT-registered business — the van is 'VAT-qualifying'. When you sell it you normally charge VAT on top of your price, and a VAT-registered buyer can reclaim that VAT. So a van advertised at "£12,000 plus VAT" costs a reclaiming buyer an effective £12,000, but a non-reclaiming buyer £14,400.
2. A Non-VAT-Qualifying Van (no VAT to add)
If you bought the van as a private individual, or a dealer sold it to you under the second-hand 'margin scheme' (where VAT was only charged on their profit margin, not the whole price), there's usually no VAT for you to add when you sell. You simply sell at your price with 'no VAT'. For most private sellers, this is the situation.
| Situation | Do you add VAT? | Appeals most to |
|---|---|---|
| VAT-qualifying van | Yes — price is "plus VAT" | VAT-registered businesses (they reclaim it) |
| Margin-scheme / privately bought van | No — price is "no VAT" | Private buyers and non-registered traders |
VAT-qualifying van
- Do you add VAT?
- Yes — price is "plus VAT"
- Appeals most to
- VAT-registered businesses (they reclaim it)
Margin-scheme / privately bought van
- Do you add VAT?
- No — price is "no VAT"
- Appeals most to
- Private buyers and non-registered traders
How to Find Out Which You Are
- Check how you bought it: did the purchase invoice show VAT separately that you (or your business) reclaimed? That points to VAT-qualifying.
- Look at the original invoice wording: a "margin scheme" note means no reclaimable VAT — and no VAT for you to add on resale.
- Ask your accountant: if the van was a business asset, they'll know its VAT history and whether output VAT is due on sale.
Advertising and Invoicing Correctly
- State it in the advert: always say "plus VAT" or "no VAT" next to the price. Silence makes buyers assume the worst and makes your van look dearer than a clearly-priced rival.
- Raise a proper VAT invoice if the van is sold plus VAT: show the net price, the VAT amount, the total and your VAT registration number. The buyer needs it to reclaim; you need it for your records.
- Keep the paperwork: retain a copy of the invoice and the sale details for your VAT records and your accountant.
Get your number, then set it clearly as plus or no VAT
