Light commercial vehicles (LCVs or vans) are subject to VAT on the purchase price but, unlike company cars, the VAT paid on an LCV can be recovered.
Subject to the normal rules of VAT recovery for VAT registered organisations, the
buyer can can usually recover the VAT on the purchase price.
However, the owner must then charge VAT on the eventual sale price when the vehicle is sold at the end of the ownership period and pay the VAT to HM Revenue & Customs.
The LCV must meet the qualification rules for VAT recovery, essentially the vehicle being designed principally for the carriage of goods with a load space that is not suitable for carrying passengers.
Special rules apply to 'cross-over' vehicles which are hybrids between cars and vans, e.g. vehicles with 'crew cabs' and load bays.
More details are available on the special section of the HM Revenue & Customs website.
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