VATVAL11900 - Specific applications: conversions of vehicles into cars
When a vehicle upon which VAT has been reclaimed is converted into a car and kept by a trader, VAT must be accounted for on the current value of the vehicle at the time of the conversion. »Ê¹ÚÌåÓýapp cost of the conversion must be included. This is an application of sub-section 2 of paragraph 6 of Schedule 6 to the VATA 1994. See paragraph 08700 of this guidance.
Where a vehicle has been converted into a car for resale, VAT is due upon the full price at the time of sale in the normal manner.