The VAT margin scheme is designed for businesses that specialise in the purchase and sale of certain goods, such as collectibles, art, and second-hand-goods. Using the scheme means that your business doesn’t have to pay VAT on the full amount that the goods are sold for. Instead VAT is calculated on the difference between the purchase price of the item and the sale price of an item.
Any profit between the difference is calculated at 16.67%, with no VAT required in the instance that no profit was made. There are a lot of regulations surrounding this margin, including which items are deemed eligible.
VAT MARGIN SCHEME
Using the margin scheme for VAT can be very worthwhile for businesses which rely on buying used or specialist goods and re-selling them at a profit. The lower rate of VAT accounts for the value that has been added between the initial purchase and the sale. While the margin scheme is beneficial, it can also mean a time-consuming process for business owners. It can be highly valuable to seek expert assistance when considering entering the margin scheme.
Our experienced accountants are able to assist your business with multiple areas of the margin scheme, including:
Keeping detailed records of your purchases and sales in the margin scheme is very important for producing an accurate assessment of your revenue. Our team at The Accountancy Solutions, can help you to better tailor your VAT requirements to the way that your business operates. From assessments of eligibility and registration, to ongoing maintenance of ledgers and records, our experienced VAT accountants are on hand to help your business benefit from the tailored VAT margin scheme.