VAT Margin Scheme Calculator
The VAT margin scheme lets dealers in second-hand goods pay VAT only on their profit margin — not the full selling price. This significantly reduces the VAT burden for used goods businesses.
⚠️ Guidance only. Margin scheme record-keeping requirements are strict. See HMRC Notice 718 for full details.
About the VAT Margin Scheme
What Qualifies?
The margin scheme applies to second-hand goods, works of art, antiques, and collectors' pieces that were originally bought from:
- Private individuals
- Businesses not registered for VAT
- Businesses that used the margin scheme on the same goods
Who Uses It?
- 🚗 Used car dealers
- 🏺 Antique dealers
- 🎨 Art dealers
- 💍 Second-hand jewellers
- 📻 Second-hand electronics dealers
- 👗 Second-hand clothing businesses
Key Rule: No VAT on Invoices
When using the margin scheme, you cannot show VAT separately on your sales invoices. The selling price is treated as VAT-inclusive and you extract the VAT from the margin.
Global Accounting
If you buy and sell many low-value items, you may be able to use "global accounting" — calculating the margin on total purchases vs total sales in a period rather than item-by-item.
Guidance only. The margin scheme has strict record-keeping requirements. Consult HMRC Notice 718 or a qualified accountant.