What goods are eligible for the margin scheme?
14/10/2021

There are a few VAT margin schemes. The margin schemes work by allowing qualifying businesses to account for VAT on their profit margin i.e., on the difference between the cost of acquiring an item and its sale price rather than on the full selling price.

Without the margin scheme the business would have to account for VAT on the full selling price of each item. If an item is sold for less than was paid for it, then no VAT is due on the sale.

The eligible goods are:

  • Second-hand goods – defined as tangible movable property that is suitable for further use as it is or after repair, other than works of art, collectors’ items, or antiques and other than precious metals or precious stones as defined.
  • Works of art and collectors’ items. The legal definition of works of art includes pictures, paintings, collages, and drawings executed by hand by the artist
  • Antiques. The legal definition of an antique is an item, other than a work of art or a collectors’ item, which is over one hundred years old.

It is the businesses responsibility to provide satisfactory evidence of an item’s eligibility for the scheme. A list of ineligible goods can be found in Notice 718 The VAT Margin Scheme and global accounting.


Contact Us

Lipson & Co
88 North Street
Hornchurch
Essex
RM11 1SR
 
01708 300410

This email address is being protected from spambots. You need JavaScript enabled to view it.
www.lipsonandco.com

Membership

 

Newsletter Sign Up

With our newsletter, you automatically receive our latest news by  e-mail and get access to the archive including advanced search options!

Newsletter Sign Up  |  Login

Newsfeed Search

Follow Us