In addition to the restrictions above, you cannot use a margin scheme:
for precious metals, precious stones or gold bought and sold as an investment
if you buy goods and the invoice shows VAT charged separately
if you sell something someone has given to you as a gift
So we have bought a trailer from a vat registered business (albeit they are on a cash scheme) for £726 plus vat, We have then sold it for £1300 including vat and my boss believes it should fall under the vat margin scheme.
So the invoice shows £726 at zero vat and 478.33 plus vat (£95.67).
Now normally we would be fine as we buy trailers from non-business people who aren't vat registered but this time it is different so does anyone out there know, Is there any way we can use the VAT margin scheme that I may be missing?
Presumably the company have claimed the VAT back on the purchase of £145.60? I can't see how it could come under the margin scheme as you would make a VAT profit on the sale.
-- Edited by 111 Bookkeeping and Payroll on Friday 5th of December 2014 11:24:40 AM
You can't use the margin scheme for any item where you have been charged VAT.
And you can't forego the input tax to bring the item into the Margin Scheme.
