HMRC’s policy guidance on using the VAT margin scheme

The HMRC implemented a more equitable method of declaring VAT on sales for businesses that do not pay VAT on their purchases. If your business supplies second-hand goods, art works, antiquities, and collectors’ items, you have an option to adopt a simplified margin scheme to account for VAT on purchases and sales. Instead of paying VAT on the entire selling price, you pay VAT only on the one-sixth of the difference between what you paid for an item and what you sold it for under the margin scheme. 

Source GlobalVATcompliance

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