VAT margin scheme

Work out the VAT on your margin when you sell second-hand goods, antiques or art.

Example values, change them. The answer updates as you type.

Work it out for

Price you paid

Price you sold it for

£83.33Full breakdown below Add your price you paid to see the VAT on your margin.Price you paid can't be negative. Enter your price you paid in pounds.Price you paid can't be more than 100,000,000 pounds.Price you paid can only go to pence: 2 decimal places.Price you paid must be a number.Add your price you sold it for to see the VAT on your margin.Price you sold it for can't be 0. Enter your price you sold it for in pounds.Price you sold it for can't be negative. Enter your price you sold it for in pounds.Price you sold it for can't be more than 100,000,000 pounds.Price you sold it for can only go to pence: 2 decimal places.Price you sold it for must be a number.Add your price you paid and price you sold it for to see the VAT on your margin.Add your purchases this period to see the VAT on your margin.Purchases this period can't be negative. Enter your purchases this period in pounds.Purchases this period can't be more than 100,000,000 pounds.Purchases this period can only go to pence: 2 decimal places.Purchases this period must be a number.Add your sales this period to see the VAT on your margin.Sales this period can't be negative. Enter your sales this period in pounds.Sales this period can't be more than 100,000,000 pounds.Sales this period can only go to pence: 2 decimal places.Sales this period must be a number.Negative margin carried in can't be negative. Enter your negative margin carried in in pounds.Negative margin carried in must be a number.Negative margin carried in can't be more than 100,000,000 pounds.Negative margin carried in can only go to pence: 2 decimal places.Add your purchases this period and sales this period to see the VAT on your margin. £83.33 Full breakdown below

VAT to pay

£83.33

You pay £83.33 VAT on a £500.00 margin.

£500.00 Margin

£416.67 Margin after VAT

£1,916.67 Sale less VAT

Checked 12 Oct 2026 by JunaydMethod and sources

What you paid £1,500.00
VAT on the margin £83.33
Margin after VAT £416.67

Margin scheme VAT is a sixth of your margin: the 20% standard rate inside your selling price.

What is the VAT margin scheme?

The VAT margin scheme lets you pay VAT on your profit margin instead of the full selling price. It covers second-hand goods, works of art, antiques and collectors' items. Buy an item for £1,500 and sell it for £2,000, and you pay £83.33 VAT on the £500 margin.

How we worked it out

£2,000.00 − £1,500.00 = £500.00 margin
£500.00 × 20 ÷ 120 = £83.3333… → £83.33 VAT (nearest penny)

Global accounting for lower-value items

Global accounting is a simpler version of the margin scheme. You work out VAT on your total margin for each VAT period, not item by item. You can't use it for any single item that cost over £500.

If your purchases are bigger than your sales in a period, there's no VAT to pay. You carry the difference into the next period's purchases.

Worked examples

Bought for £1,500, sold for £2,000 (GOV.UK's example)

Work it out for One itemPrice you paid £1,500Price you sold it for £2,000Purchases this period £4,000Sales this period £10,000Negative margin carried in –

You pay £83.33 VAT on a £500.00 margin.

VAT to pay: £83.33
Margin: £500.00
Sale less VAT: £1,916.67
Carry to next period: £0.00

Sold for less than you paid

Work it out for One itemPrice you paid £2,000Price you sold it for £1,500Purchases this period £4,000Sales this period £10,000Negative margin carried in –

You sold for less than you paid, so there's no VAT on this item.

VAT to pay: £0.00
Margin: £0.00
Sale less VAT: £1,500.00
Carry to next period: £0.00

Global accounting: £10,000 sales, £4,000 purchases, £4,000 carried in

Work it out for Global accountingPrice you paid £1,500Price you sold it for £2,000Purchases this period £4,000Sales this period £10,000Negative margin carried in £4,000

You pay £333.33 VAT on this period's £2,000.00 margin.

VAT to pay: £333.33
Margin: £2,000.00
Sale less VAT: £9,666.67
Carry to next period: £0.00

Common questions

Do you pay VAT on second-hand goods?

A VAT-registered business pays VAT when it sells second-hand goods. Under the margin scheme, it pays VAT only on the difference between what it paid and what it sold the item for.

How do you calculate VAT on the margin scheme?

Take the selling price, subtract what you paid, then multiply the margin by 20 and divide by 120. A £500 margin carries £83.33 of VAT.

Can you claim VAT back on margin scheme goods?

You can't reclaim VAT on the goods themselves: the margin scheme can't be used for an item you were charged VAT on. VAT on business overheads can be reclaimed in the normal way.

Are second-hand goods VAT exempt?

No. A VAT-registered business owes VAT on second-hand goods it sells, but the margin scheme lets it pay VAT on the margin only.

Need VAT on a full price instead?

Add or remove VAT on any amount at the standard, reduced or zero rate.

Open the VAT calculator

More VAT calculators

Method and sources

Each calculator applies HMRC's published rates and rules, works in whole pence and rounds to the nearest penny. Every step is shown, and every figure links to its GOV.UK or HMRC page with the date we checked it. Before launch, each worked example is checked against HMRC's own guidance. Spot something wrong? Tell us and we will fix it and note the change.

Goods eligible for the margin scheme, bought without VAT.
Standard-rate VAT on the margin.
Rounded to the nearest penny; half a penny rounds up.

GOV.UK: VAT margin schemes Checked 12 Oct 2026
GOV.UK: VAT margin schemes, keeping records Checked 12 Oct 2026
GOV.UK: VAT margin schemes, eligibility Checked 10 Oct 2026
HMRC: Using the Global Accounting VAT margin scheme Checked 12 Oct 2026
GOV.UK: VAT rates Checked 12 Oct 2026