VAT Margin Scheme Calculator

What is the VAT Margin Scheme?

The VAT Margin Scheme allows businesses to pay VAT only on the profit margin of certain goods, rather than the full selling price. This scheme typically applies to:

• Second-hand goods
• Works of art
• Antiques and collectibles
• Classic cars and other vehicles

Instead of charging VAT on the full selling price, businesses only pay VAT on the difference between their purchase price and selling price (the margin).

How to Use the Margin Scheme Correctly

Eligibility Requirements:

• You must have purchased the goods from a non-VAT registered individual or business
• You must not have received a VAT invoice for the purchase
• For global accounting, you must maintain detailed stock records

Record Keeping:

When using the margin scheme, you must keep:

• Stock book records showing purchase and selling prices
• All purchase invoices or receipts
• All sales invoices clearly marked "Margin Scheme - VAT not separately displayed"

Important Notes:

• If you make a loss on an item (selling price lower than purchase price), no VAT is due on that item
• For global accounting, if total purchases exceed total sales in a period, you cannot claim a VAT refund - you must carry the excess forward to the next period
• You cannot claim back input VAT on margin scheme goods

Disclaimer: This calculator is for guidance only. Tax regulations vary by country and change over time. Always consult with a qualified accountant or tax advisor for your specific situation.