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Post Info TOPIC: VAT 2nd Hand Margin Scheme
sarahleighton


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VAT 2nd Hand Margin Scheme
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Hi All,

Just wondering if anyone could please help me with a query on the VAT secondhand margin scheme.

My client has bought an iPhone under this scheme so no VAT has been paid on the purchase.

When he sells this on should he charge VAT on the full amount or should he purely charge VAT on the markup?

Any help would be much appreciated...

Thanks

Sarah



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Julie Hall


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Hi there, the vat should be calculated at the difference between the sale price and the cost price. i.e. profit element, and this profit element will be the VAT inclusive price.  Example Sale of £1000 and purchased at £800 = £200 profit the vat is inclusive of the £200.  It is worth have a looking on HMRC rules etc regarding this scheme on their website as very accurate records need to be kept relating to the purchases and sales.



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Julie
sarahleighton


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Hi Julie

Many thanks for your reply.

Does that mean it's not the type of VAT scheme that you have to be signed up for, like FRS for example?

Sarah

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Julie Hall


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Hi Sarah, no I do not think you have to be signed up, HMRC website states

'You don't need to fill in an application form to join a scheme and you can start using it at any time'

I think the key point to remember is to work out the records/evidence that HMRC need you to keep, and the rules they stipluate. 

I am doing a VAT diploma so it is refreshing my mind on things as well.  My course provides a good summary sheet on it if you would like me to email it to you, just let me know your email address.

 



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Julie
sarahleighton


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Hi Julie

Yes please if you wouldn't mind emailing me the summary sheet that would be good. My email adress is sarah@slbookkeeping.co.uk.

I fear my client has probably sold on the phone and just charged VAT at the full rate!

Thanks very much for your help.

Sarah

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Julie Hall


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Well I suppose at least it benefical to HMRC rather than the other way around, will sort out scan for you shortly.  Julie



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Julie
sarahleighton


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Too true. Many thanks

Sarah

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