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VAT margin scheme calculator

On the margin scheme you pay VAT only on the difference between what a second-hand item cost and what it sold for. See what you owe and what it saves.

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Bought from a private person or another margin-scheme seller, so there was no VAT to reclaim.

Including VAT.

Optional. Fees, postage, repairs. They lower your profit but not the margin. The standard rate in United Kingdom. Change it if your goods have a different rate.

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VAT to pay £10.00
10% of the selling price
Your margin £60.00 Selling price minus purchase price
Saved against standard VAT £6.67 Standard VAT would be £16.67
Where the money goes of £100.00
  • Item cost 40%£40.00
  • VAT 10%£10.00
  • Profit 50%£50.00
Full breakdown
VAT margin scheme calculator
Selling price+£100.00
Purchase price−£40.00
Margin£60.00
VAT inside the margin (20%)−£10.00
Profit£50.00
Margin scheme vs standard VAT
Margin schemeStandard scheme
VAT to pay£10.00£16.67
Profit£50.00£43.33

VAT due = margin × 20 ÷ (100 + 20)

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Questions

What is the VAT margin scheme?

A way of charging VAT on second-hand goods, works of art, antiques and collectors' items. Instead of VAT on the whole selling price, you pay it on your margin: the difference between what you paid and what you sold for.

Which goods can go on the margin scheme?

Second-hand goods you bought without VAT you could reclaim, for example from private people, or from another business that sold them on the margin scheme. New goods, and goods bought on a VAT invoice, use the standard scheme.

What happens if I sell at a loss?

There is no VAT to pay on that item. You cannot reclaim VAT on the loss, and the loss does not reduce the VAT on other items.

What records do I need?

A stock book with each item's purchase and selling price, plus purchase and sales invoices that show the margin scheme. Rules differ by country, so check with your tax authority or accountant.

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