Global Accounting margin scheme

By Tolley

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Global Accounting margin scheme
  • Excluded goods
  • Conditions
  • Using the scheme
  • Specific transactions
  • Books and records
  • Completing the VAT return
  • Ceasing to use the scheme

VATA 1994, s 50A; SI 1995/1268 Article 12; SI 1992/3222, Article 2; VATMARG03000; VAT Notice 718 ; De Voil Indirect Tax Service V3.535 (subscription sensitive)

This guidance note provides an overview of the main principles of the Global Accounting scheme and this note should be read in conjunction with Overview of margin schemes and Operating the margin scheme.

The Global Accounting scheme is a simplified version of the normal margin scheme.

The margin for businesses using this scheme is the difference between the eligible total purchases and total eligible sales made during the VAT return period.

Businesses that would predominately benefit from using this scheme are those that:

  • buy / sell high volume, low value goods
  • cannot keep the accounting records that are required to use the normal margin scheme

The scheme can only be used for goods that cost £500 or less per item and the goods which are not excluded from the scheme (see below).

Excluded goods

None of these goods can be sold using the Global Accounting scheme:

VATMARG03100; SI 1995/1268, Article 13
  • aircraft
  • boats (including outboard motors)
  • caravans and motor caravans
  • horses and ponies - see the Margin scheme - horses and ponies guidance note
  • motor vehicles / motorcycles (excluding vehicles that have already been broken up for scrap) - see the Margin scheme - second hand motor vehicles guidance note

A VAT registered business may use the scheme provided the following conditions are met:

SI 1995/1268, Article 13

    More on Margin schemes: