How to Check If a Car Is VAT Qualifying
What Is a VAT Qualifying Car?
A VAT qualifying car is one where VAT can be reclaimed, usually when sold by a VAT registered seller with a proper VAT invoice. These are often new or used cars that haven’t been owned by private individuals. Knowing a car’s VAT qualifying status is essential for businesses or exporters, as it can make a significant difference in cost savings and VAT recovery potential.
Why It Matters: VAT Implications When Buying or Exporting a Car
A car’s VAT status affects your ability to reclaim VAT, which can lead to significant savings—especially for businesses and exporters. VAT qualifying cars allow eligible buyers to reclaim VAT, helping with cash flow and reducing overall costs. Understanding how VAT works when buying or exporting ensures accurate budgeting and full compliance with VAT recovery rules.
How to Check If a Car Is VAT Qualifying
To determine if a car is VAT qualifying follow these simple steps:
✔ Check the advert: Is the car listed as 'vat qualifying' , ‘ex showroom,’ ex-demo, ‘demonstrator’ or 'ex lease'
✔ Check the mileage: Is it under 10,000 miles. The lower the better.
✔ Is it under 1 year old: Lease companies tend to sell their cars within a year or two. Company cars or stock cars in a showroom are likely to be sold sooner than that.
✔ Ask the seller: Ask the dealer if the car is still VAT qualifying. They may need to check the paperwork to be sure.
✔ Check the Sales Invoice: The VAT must be shown separately on the invoice.
✔ Confirm the Dealer VAT Registration: Only VAT registered sellers can sell vehicles VAT free and issue VAT qualifying invoices.
Always ensure the documentation reflects the correct vat qualifying status.
Common Misconceptions About VAT Qualifying Cars
Not all used cars are non-VAT qualifying
Many people assume that all used cars are non-VAT qualifying, but this isn’t always true. If the car was previously owned by a VAT-registered business and sold with VAT accounted for, it may still be VAT qualifying.
Private sales can’t be VAT qualifying
VAT qualifying cars must be sold by VAT-registered businesses. If you're buying from a private individual, the sale won’t include VAT and therefore cannot be VAT qualifying.
“Plus VAT” doesn’t always mean VAT can be reclaimed
A listing that says “Plus VAT” suggests VAT is being charged, but this doesn’t automatically mean it's reclaimable. You’ll need a proper VAT invoice and confirmation that the car is VAT qualifying.
What to Do If You’re Not Sure
Request a Proforma Invoice
A proforma invoice can give you a preview of how the sale will be invoiced, showing whether VAT is included and how it will be treated. This is a useful way to confirm VAT status before making payment.
Use a Reputable Export Company
Professional car exporters deal with VAT qualifying vehicles every day and can verify eligibility on your behalf. Working with an experienced exporter ensures you avoid costly mistakes and receive the correct paperwork for VAT reclaim.
Documents You Need to Confirm VAT Qualifying Status
Verifying a car’s VAT qualifying status requires specific documents. A valid VAT invoice and purchase invoice are essential, as they indicate the selling price, purchase price, and VAT applied. You should also have evidence of payment and any relevant VAT return documentation.
Buying from a VAT Registered Seller
When purchasing from a VAT registered seller, ensure they provide a VAT invoice and that they charge VAT on the transaction. This is vital for the buyer to reclaim VAT later. Buying from a compliant seller ensures all VAT elements are transparent and reclaimable.
What If You Buy from a Private Owner?
Buying from a private seller generally means the car is non vat qualifying. These vehicles are typically privately owned and do not come with a VAT invoice. As a result, the VAT element cannot be reclaimed. If you see a vehicle listed without reference to VAT status, or if it doesn’t come with proper documentation, assume it is non vat qualifying. Understanding this distinction helps buyers avoid unexpected tax implications.
Final Checklist: Is This Car VAT Qualifying?
Before you commit to purchasing, use this quick checklist to confirm whether the car is genuinely VAT qualifying. This is especially important if you're planning to reclaim VAT or export the vehicle from the UK.
✔ Invoice shows VAT separately
A VAT qualifying sale should clearly state the VAT amount on the invoice, not just a total price.
✔ Dealer confirms VAT is reclaimable
Always ask the seller to confirm in writing that the car is VAT qualifying and that the VAT is reclaimable.
✔ Seller is VAT registered
Only VAT-registered businesses can issue VAT qualifying invoices — check their VAT number if you’re unsure.
✔ Written statement of VAT status included
Ensure the invoice or sales agreement explicitly states the car’s VAT qualifying status to protect your rights, especially for export or business use.
Knowing VAT Qualifying Status Can Save You Money
If you’re still not fully confident about identifying a VAT qualifying car, don’t worry — our expert team is here to help. We take the stress out of the process by verifying VAT status, handling professional VAT reclaim, and managing the entire export for you. Contact us today for a seamless and secure car buying experience and export.
