VAT Margin Scheme Calculator
Pay VAT on the margin (sale price − purchase price), not the full sale price. Used for secondhand goods.
Margin scheme rules: VAT only on the gross profit per item, not the sale price. Useful for car dealers, antique dealers, art galleries, secondhand shops. The margin must be calculated per item or under the global accounting scheme.
Worked examples
Buy car for £8,000, sell for £10,000. Margin £2,000. VAT = £2,000 / 1.2 × 0.2 = £333.33 — vs £1,666.67 on the standard scheme.
Sources:
HMRC VAT margin schemes
· retrieved 2026-05-12.
Frequently asked questions
Who can use the margin scheme?
Dealers in secondhand goods, art, antiques, and collectibles. Goods must have been bought from a non-VAT-registered supplier, an EU member state under their margin scheme, or stock from before VAT registration.
Does it work for new goods?
No — only secondhand or qualifying art/antiques.