VAT MARGIN SCHEME CALCULATOR
VAT MARGIN SCHEME Calculator
Charge VAT on your margin, not the full price. See the saving per item and per year, with the stock book HMRC requires.
VAT Margin Scheme Calculator
If you buy second-hand goods from people who are not VAT registered, you can charge VAT on your margin instead of on the whole price. It saves you the VAT fraction of whatever you paid for the item, and nothing about the selling price changes that.
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Fill in a purchase price to see the answer.
Your margin –
VAT under the margin scheme –
VAT under the standard scheme –
Saved by using the margin scheme –
Kept, margin scheme –
Kept, standard scheme –
Saved across a month –
Saved across a year –
The saving is the VAT fraction of the purchase price. It does not depend on what you sell the item for, so a good day and a bad day save you the same amount on the same stock.
Before you use it, five things that decide whether you can
It is for second-hand goods, works of art, antiques and collectors' items. Not new stock, not anything you had to pay VAT on when you bought it.
You cannot reclaim VAT on the purchase. That is the trade: no input tax on the item, VAT only on your margin.
You must keep a stock book showing each item, what you paid, what you sold it for and the margin. Without it the scheme is not available, and this is the requirement people fail.
If the margin is nil or negative there is no VAT to pay, and you cannot use the loss to reduce VAT on anything else.
For lots of low-value items there is a simpler variant called global accounting, which works on total purchases and sales in a period rather than item by item.
The stock book, in Excel
The workbook is the record HMRC requires: one row per item, with the purchase and sale details, the margin and the VAT, totalled by quarter. It also compares the two schemes across your whole stock so you can see whether the margin scheme is worth the paperwork.
Download the Excel workbook Not sure the scheme applies to what you sell? Get in touchFAQs
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