Last updated: 14 October 2026
Should you add VAT when selling a trailer used by your VAT-registered business?
Yes, in most cases. If your business is VAT-registered and reclaimed the VAT when it bought the trailer, you must charge VAT at 20% on the sale price when you sell it, even if it is second-hand. Selling business assets is a taxable supply, just like selling stock. The only usual exception is where you couldn’t reclaim VAT on the purchase, for example because you bought it before registering and didn’t claim it, or because you bought it under a margin scheme.
Why VAT applies to used assets
VAT is charged on all taxable supplies made in the course of your business, including selling off equipment, vehicles, trailers and machinery. It doesn’t matter that the asset is used or that you aren’t in the business of selling trailers.
When you may not charge VAT
- You bought the trailer from a private seller or under the second-hand margin scheme, so there was no VAT to reclaim. You may be able to sell it under the margin scheme
- You weren’t able to reclaim any VAT on it because it was used for exempt activities
- You sell it as part of a transfer of a going concern
- It is exported outside the UK with proof of export, which makes it zero-rated
Example
A haulier bought a trailer for £20,000 plus £4,000 VAT and reclaimed the VAT. Five years later, it sells for £8,000. The business issues an invoice for £8,000 plus £1,600 VAT and declares the £1,600 on its VAT return. If the buyer is VAT-registered, they can reclaim it.
Agreeing the price
Agree with the buyer whether the price includes VAT. If a contract doesn’t say, the price is treated as VAT-inclusive, so a quoted £8,000 would include £1,333.33 of VAT.
Income tax and capital allowances
For tax purposes, the sale proceeds (excluding VAT) are deducted from your capital allowances pool. If you claimed the Annual Investment Allowance, the sale may create a balancing charge that adds to your taxable profit. VAT itself doesn’t affect your profit if you’re VAT-registered.
Selling to an individual
A private buyer can’t reclaim VAT, so they pay the full VAT-inclusive price. That may affect what you can get for the trailer, but you must still charge VAT.
Part-exchange
If you trade the trailer in against a new one, VAT is due on the trade-in value. The dealer should treat it as a separate supply from you, and you should issue a VAT invoice.
Frequently asked questions
Do I charge VAT if I’m no longer trading?
Selling assets as part of closing a business is still a taxable supply while you are registered. On deregistration, you may also have to account for VAT on assets you keep.
What if the trailer was bought before I registered?
If you reclaimed the VAT as a pre-registration purchase, you charge VAT on the sale.
Is a trailer a “car” for VAT?
No. Trailers and commercial vehicles are not cars, so VAT recovery works normally.
Do I need to issue a VAT invoice?
Yes, if the buyer is VAT-registered.
Related: VAT on capital assets and VAT after deregistration.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with VAT on selling business assets. See our VAT accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
