VAT Margin Scheme

VAT registered businesses use the VAT margin scheme to tax the difference between what they sell and buy. Rather than the full input and output tax in standard VAT, the margin scheme will only charge on the net difference between sales and purchase of your products. You have to pay a 16.67% VAT tax on the difference in your sales and purchase. If you sell the following items, you are eligible to use the VAT margin scheme.

  • Second-hand products
  • Artwork
  • Work of antiques
  • Collector’s items

You are not eligible to use the VAT margin scheme if:

  • You purchase items with VAT charges
  • Expensive metal
  • Gold investment
  • Expensive stones

How to Register for VAT Margin Scheme?

You are not required to register with HMRC for VAT margin scheme. If you satisfy the above-mentioned criteria to use a margin scheme, you can simply apply the scheme any time but you have to keep records and notify HMRC on VAT return submission. If you are engaged in the following sales you cannot use the VAT margin scheme:

  • Sale of second-hand vehicles business
  • Sale of horses and ponies
  • Sale of caravans & houseboats
  • You can use the Global Accounting Scheme for low priced and high volume products

VAT Return Services by Hayes Accountants

Our experienced accountants at Hayes Accountants will guide and assist to choose the VAT margin scheme and report to HMRC in your VAT tax return. Our professional team of accountants will assist in using the margin scheme and prepare and file your VAT tax return to HMRC before the deadline. By maintain the proper records, our accountants will help you to use the VAT margin scheme without any stress.


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