VAT Margin Schemes

VAT margin schemes tax the difference between what you paid for an item and what you sold it for, rather than the full selling price. You pay VAT at 16.67% (one-sixth) on the difference.

You can choose to use a margin scheme when you sell: 

  • second-hand goods 

  • works of art 

  • antiques 

  • collectors’ items 

You cannot use a margin scheme for: 

  • any item you bought for which you were charged VAT 

  • precious metals 

  • investment gold 

  • precious stones 


You buy a work of art for £1,500 and sell it for £2,000. Using a margin scheme, you pay VAT at 16.67% (one-sixth) on the difference: £500. This means you will pay £83.33. 

How To Start  

You can start using a margin scheme at any time by keeping the correct records (external link), and then reporting it on your VAT return (external link). You do not have to register.  

You will have to pay VAT (external link) on the full selling price of each item if you do not meet all the scheme’s requirements.  


There are special rules if you are selling: 

There are also special rules for dealers (external link), pawnbrokers (external link) and auctioneers (external link)

See Also: