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I guess the question is whether these count as "VAT qualifying" cars. There is actually no difference normally on the VAT you end up paying on a margin car or VAT Qualifying. The nett amount is always the same percentage of your profit. Presumably you reclaim the VAT on your purchase and then charge VAT on your sale? You will then be paying the difference between the two to HMRC which will be the same as a margin car. To put it another way: On a car bought for £5000 and sold for £6000: VAT Qualifying: Car cost £4166.67 + VAT = £5,000. Reclaim £833.33. Sell for £6,000 (£5,000 + £1000 VAT). Total amount payable to HMRC is £1000-£833.33=£166.67 Margin Car: Buy for £5000. Sell for £6000. Profit = £1000. VAT Margin rate is 16.67%. 16.67% of £1000 profit = £166.67 to be paid to HMRC.