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Introduction

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There are a number of key VAT Margin Schemes that are available to businesses which allows them to only charge VAT on the difference between the selling price and the price they paid for second hand and other specific goods.  Each of these schemes is governed by strict eligibility and operational rules and summaries of the main schemes are listed below with links at the end to the specific HMRC notices which provide in depth detail about each scheme.  

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VAT Margin Scheme

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VAT margin schemes tax the difference between what you paid for an item and what you sold it for, rather than VAT being payable on the full selling price. You pay VAT at 16.67% (one-sixth) on the difference.

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You can choose to use a margin scheme when you sell:

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• Second-hand goods

• Works of art

• Antiques

• Collectors Items

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See More information here VAT margin schemes

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VAT Margin Scheme for Second Hand Vehicles

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There are different rules if you buy or sell second-hand vehicles under a margin scheme,  You can use a margin scheme to account for VAT on the difference between the price you pay for a second-hand vehicle and the price you sell it for, instead of the full selling price of each vehicle.

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See More information here Using the VAT margin scheme for second-hand vehicles

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Global Accounting VAT Margin Scheme

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The Global Accounting Scheme is a simplified version of the VAT Margin Scheme above.  You can use this scheme to account for VAT on the margin between your total eligible purchases and total eligible sales, and not the margin on the sale of individual items.  This scheme is ideal for businesses that bulk buy and sell small value items.  

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See More information here Using the global accounting VAT margin scheme

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Other VAT Margin Schemes

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There are other VAT Margin Schemes for different goods and scenarios and the HMRC guidance is listed below.

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Using a VAT margin scheme if you’re an agent

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Using the auctioneers' VAT margin scheme

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Tour Operators Margin Scheme (VAT Notice 709/5)

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Selling houseboats and caravans if you use a VAT margin scheme

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-Contains public sector information licensed under the Open Government Licence v3.0.

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