Buying a used commercial vehicle

Monday December 2017

If you buy a second-hand commercial vehicle from a dealer, they will normally try to sell it to you under the second-hand margin scheme. This means that they only account for VAT on the profit margin. You will not be provided with a VAT invoice and you will be unable to recover this VAT as it is a condition of the scheme.

However, the use of the second-hand scheme by a dealer is not compulsory. If a VAT-registered business is buying a second-hand commercial vehicle it is actually better off not buying it on the second-hand scheme but paying VAT on the full purchase price. Ironically, the dealer is also better off by not using the scheme when selling to a VAT registered business, so ask the dealer to sell you the vehicle outside the scheme to benefit you both.

 

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