VAT Second-Hand Goods Margin Scheme Calculator 2026

The VAT Margin Scheme allows VAT-registered dealers to pay VAT only on the profit margin (selling price minus purchase price), not the full selling price. It applies to second-hand goods, antiques, art, and collectors' items bought from non-VAT-registered sellers.

VAT = Selling price minus Purchase price, divided by 6 (i.e., 1/6 of the gross margin). This is because the margin is treated as VAT-inclusive at 20%, so VAT = margin × 20/120 = margin/6.

Eligible goods include: second-hand goods, antiques (100+ years old), works of art, and collectors' items. The goods must have been purchased from a non-VAT-registered private individual or unregistered business. New goods are not eligible.

Yes — second-hand vehicles have their own margin scheme. You must keep a stock book with details of every vehicle bought and sold. The VAT calculation is the same (1/6 of margin).

No — you cannot reclaim input VAT on goods you buy under the margin scheme. In return, you only pay VAT on your profit margin, not the full selling price.

You must keep: a purchase invoice or stock record for every item, the selling price, calculation of the margin, and the VAT due. For the Global Accounting Scheme, you keep a stock book of all eligible goods.

The Global Accounting Scheme is a simplified version of the Margin Scheme for businesses with many similar low-value second-hand items. You calculate the total margin across all eligible goods in a VAT period rather than item by item.

No — you must not show VAT separately on a Margin Scheme sales invoice. The selling price shown is VAT-inclusive but cannot state a separate VAT amount. Write 'VAT margin scheme — buyer cannot reclaim VAT' on invoices.