Guide

VAT-Qualifying vs Margin-Scheme Used Vans

Whether your VAT-registered company can reclaim the VAT on a used van comes down to two words on the invoice: “VAT-qualifying” or “margin scheme”. Here’s the difference, in plain English.

calendar_today Published 15 April 2026 schedule 2 min read verified Reviewed by Van Finance Limited

On this page

What “VAT-qualifying” means
What “margin scheme” means
How to tell which you’re buying
Why it matters for your finance

VAT-Qualifying vs Margin-Scheme Used Vans, featured image

What “VAT-qualifying” means

A VAT-qualifying van is one where VAT was reclaimed by a previous business owner, so VAT is charged again on the sale, and a VAT-registered buyer can usually reclaim it. The invoice will show VAT as a separate line.

What “margin scheme” means

Under the second-hand margin scheme, the seller only pays VAT on their profit margin and doesn’t show VAT separately, so there’s no VAT for you to reclaim. The van may be cheaper up front, but you can’t recover any VAT.

How to tell which you’re buying

Ask the seller directly: “Is this van VAT-qualifying or margin scheme?”
Check the invoice, VAT-qualifying shows VAT as a separate, reclaimable line.
Factor it into the real cost: a margin-scheme van with no reclaim can cost more net than a slightly dearer VAT-qualifying one.

Why it matters for your finance

On hire purchase you typically reclaim VAT on a qualifying purchase; on a finance lease or leasing you usually reclaim VAT on the rentals instead. The van’s VAT status changes which route is most efficient.

This is general information, not financial or tax advice. Tax treatment depends on your individual circumstances and may change. Always confirm your position with a qualified accountant before making a decision. Van finance is subject to status and eligibility.

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Written by Van Finance Limited

Our team arranges used van finance for UK limited companies every day, across a panel of trusted UK lenders. This guide reflects what we see in practice. Learn more about us.

FAQs

Straight answers to the questions we hear most, on eligibility, credit checks and how the process works.

Can I reclaim VAT on a used van?

If it’s VAT-qualifying, you’re VAT-registered and it’s used for business, usually yes. Margin-scheme vans have no reclaimable VAT. Confirm with your accountant.

Is a margin-scheme van a bad buy?

Not necessarily. It can still be good value, but compare the net cost after any VAT you could have reclaimed on a qualifying alternative.