Commentary

V3.535 Margin scheme—global accounting

Part V3 Supplies, acquisitions and imports

V3.535 Margin scheme—global accounting

V3.535 Margin scheme—global accounting

By way of simplification of the system of accounting for VAT on supplies under the margin scheme, the global accounting scheme enables a taxable dealer to opt to account for VAT on the total profit margin on goods supplied by him during a prescribed accounting period rather than on an item by item basis. The use of the global accounting scheme is optional1.

One advantage of the scheme is that, unlike the other margin schemes, it allows the offsetting of a loss on one transaction against profits made on others.

Conditions

The global accounting scheme may be used to account for VAT on goods which2

  1.  

    (1)     have a purchase price3 of £500 or less per individual item (including bulk purchases with a total purchase price in excess of £500, except for any individual items costing more than £500 included in the bulk purchase4); and

  2.  

    (2)     do not comprise motor vehicles (including motor cycles), aircraft5, boats6 and outboard motors, caravans and motor caravans7, horses and ponies8.

Motor vehicles and motorcycles broken up for scrap may be included in the global accounting scheme, as long as they are otherwise eligible for the margin scheme. The person must keep normal commercial documentation to demonstrate that the vehicle has ceased to exist. Where the purchase of the vehicle was shown in the person's

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