When someone buys a new van, or indeed a new car, they'll pay 20% VAT on that purchase. Businesses (or individuals) who are VAT-registered are able to claim back the VAT they are charged when they buy a van, but when they sell the now-second-hand van, they will need to charge VAT to whoever buys the van.
This can be done in one of two ways: either by charging VAT on the full sale price of the van or only charging VAT on the profit of the van. The first approach means the buyer, if they are VAT-registered, can claim the VAT back.
The second approach, known as the VAT second-hand margin scheme, means that a VAT-registered seller may only charge VAT on the profit of the van, and this has two consequences for the buyer: 1) they won't be able to claim any VAT back, 2) they may pay less overall.
Does this apply to all vans?
No, there are vans whose owners won't have claimed back the VAT when they purchased them, most likely because they were not VAT-registered, which means VAT won't be chargeable when bought by somebody else.
Vans used for commercial purposes are most likely to require VAT payment.
Why does this apply to vans and not cars?
Cars are much less likely to have had their VAT claimed back than vans; this is because many used vans remain VAT-qualifying because their previous owners have been VAT-registered businesses. Vans have greater commercial applications and so are more likely to be used by companies over cars.
There are, of course, some cars that will have been used for commercial purposes and will have had their VAT claimed back; these cars will require a VAT payment from the buyer.
You can find out more about reclaiming VAT paid on used commercial vehicles here.
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