Do I charge VAT when I sell a van?
HMRC’s VAT Notice 700/64 (section 7.4) covers commercial vehicles such as vans. If you were charged VAT when you bought the vehicle and could recover at least part of it, you account for VAT on the full selling price when you sell it. If you weren’t charged VAT when you bought it (for example, you bought it from a private individual), the notice says you can use the margin scheme for the sale.
And a car?
The same notice covers cars:
- If you couldn’t reclaim the VAT when you bought the car, the sale is exempt: you don’t charge VAT, and you can’t issue a VAT invoice (section 7.2).
- If you did reclaim the VAT, you account for VAT on the full selling price, and the car can’t be sold under the margin scheme (section 7.1).
Is it a van or a car for VAT?
VAT Notice 700/64 (sections 2.1 and 2.2) defines a car as a vehicle constructed or adapted solely or mainly for carrying passengers, or one that has roofed accommodation behind the driver’s seat fitted with side windows. Some vehicles aren’t cars for VAT, including those with a payload of one tonne or more. The notice has the full definition.
How does your price work for VAT-registered sellers?
- On our form, answer yes to “Are you selling as a VAT-registered business, and will you give us a VAT invoice for the sale?”
- Your price is shown plus VAT, with the total including VAT.
- When we buy, you give us a VAT invoice for the total, with your VAT number on it.
If you’re selling a car on which you reclaimed the VAT, one of our buyers checks the details with you.
What must a VAT invoice show?
HMRC’s VAT Notice 700/21 (section 4.1) lists what a full VAT invoice must include. The main items are:
- a unique invoice number
- the time of supply, and the date of issue if that’s different
- your name, address and VAT registration number
- the buyer’s name and address (ours)
- a description that identifies the vehicle, such as the registration number and VIN
- the price excluding VAT, the VAT rate and the VAT amount
General information only, not advice about your own situation. HMRC’s VAT notices have the full rules.