Use the margin scheme for second-hand goods

A margin scheme taxes the difference between what you paid for an item and what you sold it for. You pay VAT of one-sixth of that difference. You can start using it at any time by keeping the right records and reporting it on your VAT return. You do not have to register for it.

You can use it for second-hand goods, works of art, antiques and collectors' items. You cannot use it for any item you were charged VAT on when you bought it, or for precious metals, investment gold or precious stones. Overheads, repairs, parts and accessories stay outside the margin calculation: reclaim the VAT on them in the normal way.

If you sell high volumes of low-price items, the Global Accounting Scheme is a simpler version that works out the margin on your total purchases and sales.