The VAT margin scheme taxes the difference between what you paid for an item and what you sold the item for, rather than the full selling price. You would pay VAT at 16.67% on the difference between the purchase price and the selling price as long as you are elligible.
You can choose to use a margin scheme when you sell:
- second-hand goods
- works of art
- antiques
- collectors’ items
You can’t use a margin scheme for:
- any item you bought for which you were charged VAT
- precious metals
- investment gold
- precious stones
