Selling a used van or lorry from your business

Most working vans and lorries are sold on when a business moves up a size or changes direction. A smooth sale leaves the buyer confident and your own books straight. This page covers the paperwork, tax and handover points for a business selling a used commercial vehicle in Great Britain.

Have the history ready

GOV.UK's step-by-step guide for buyers asks them to check a vehicle's MOT history, any safety recalls and the log book before they buy. So a buyer will usually want to see all three.

Anyone can look up a vehicle's MOT history online with its number plate. It shows whether each test was passed or failed, the mileage at each test and when the next one is due. Results for vans go back to 2005. For lorries and trailers they go back to 2018.

Describe it as it is

GOV.UK's guidance for businesses says customers are entitled to a full refund if an item is faulty or not as described. A business does not have to refund a customer who knew about a fault when they bought the item. Writing any known faults into the description and the receipt helps both sides.

VAT on the sale

A VAT-registered business that reclaimed some or all of the VAT when it bought a van must account for VAT on the full selling price. HMRC says this in its notice on motoring expenses.

If no VAT was charged when you bought it, for example because it came from a private seller, you can use the margin scheme. Under that scheme, VAT is due only on the difference between what you paid and what you sell for. A business that does not trade in vehicles can use it for a one-off sale without the full dealer records. It still has to meet the scheme's other conditions and keep evidence of both prices.

Capital allowances

Selling a vehicle you claimed capital allowances on counts as disposing of it. You include its value in your calculations for the accounting period in which you sell it. The value is usually the price you sold it for.

If you claimed the full cost when you bought it, for example under the annual investment allowance, the sale can lead to a balancing charge. That amount is added to your profits. You never deduct more than the original cost, even if the vehicle sells for more.

Lorries, tachographs and the operator's licence

Operators must download the data from a vehicle's tachograph immediately before handing control of it to someone else, such as when it is sold. A company card can also lock out your data, which marks the end of your interest in the vehicle.

Once the vehicle has gone, update your operator's licence through the online Vehicle Operator Licensing service. The government's licensing guide says adding or removing vehicles is free.

Handing it over

When the sale is done, tell DVLA online that you no longer own the vehicle. The same service sends the log book to the new keeper. You get a refund for any full months left on the vehicle tax.

The tax does not pass to the buyer, so they need to tax the vehicle before they drive it away. If there is no log book, you write to DVLA with the exact date of sale and the new keeper's name and address.