V3.536 Margin scheme records

A person wishing to use the margin scheme, including the auctioneers' scheme or the global accounting scheme, must comply with1


    (1)     such conditions as HMRC may direct in a notice; and


    (2)     such conditions as HMRC may otherwise direct.

HMRC have published Notices 718, 718/1 and 718/22 which prescribe the record-keeping, invoicing and accounting requirements in connection with the schemes. The records required to be kept by HMRC must be retained for six years. Where stock includes goods obtained more than six years previously, evidence of eligibility for margin scheme treatment must be retained3.

The margin scheme (other than global accounting and auctioneers' schemes)

To be eligible to use the margin scheme, a person must keep4


    (1)     the purchase and sale invoices; and


    (2)     a stock book or similar record for margin scheme transactions.

Stock book

The taxable person must enter the purchase details of goods bought which he intends to include in the margin scheme and the sales details of goods sold under the margin scheme in his stock book5. The stock book must include the following minimum details under separate headings6


    (1)     stock number in numerical sequence;


    (2)     date of purchase/sale;


    (3)     purchase/sales invoice number;


    (4)     name of seller/buyer;


    (5)     a description of the item (in the case of a car, its vehicle registration number);


    (6)     purchase/sales invoice number;


    (7)     purchase/selling price (or method of disposal);


    (8)     margin on sale; and


    (9)     VAT due (margin x VAT fraction).

Goods obtained on a sale or return basis must be recorded

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