VAT Margin Scheme Calculator
VAT on the margin, not the full sale price.
Rates change with budgets and local ballot measures, and the rate that applies depends on the delivery address and product category. Treat these as planning figures, not as a filing.
VAT under the margin scheme
£30.00
against £80.00 on the full price
The margin scheme saves £50.00 here. Two things catch people out: VAT is inside the margin rather than added to it, so you divide by 1.20; and restoration costs do not reduce the margin for VAT purposes even though they reduce your profit.
How the VAT Margin Scheme Calculator works
The margin scheme lets dealers in second-hand goods, art, antiques and collectibles charge VAT on their margin rather than the full selling price — which matters enormously when you bought the item from someone who charged no VAT. Two details trip people up: the VAT is inside the margin, not added to it, and restoration costs do not reduce it.
Not financial advice. Marketplace fees change, and they vary by country, plan and seller status. Every rate here is an editable default, not a quoted price — check the platform's current fee schedule before you price a product against it. This is not tax or business advice.
Frequently asked questions
How is margin scheme VAT calculated?
On the difference between what you paid and what you sold for, with the VAT inside that margin. A £180 margin at 20% contains £30 of VAT, found by dividing by 1.2 — not £36.
What qualifies for the scheme?
Second-hand goods, works of art, antiques and collectors' items, bought in circumstances where you could not reclaim VAT — typically from private individuals or other margin scheme dealers.
Can I deduct restoration costs from the margin?
No. The margin is the sale price less the purchase price, full stop. Costs of repair, restoration and parts reduce your profit but not the VAT-bearing margin, which is a common and expensive misunderstanding.
What records do I need?
A stock book recording each item's purchase and sale with matching invoices. Margin scheme records are itemised rather than aggregated, and failing to keep them properly means VAT is due on the full selling price instead.