Global accounting margin scheme

Produced by Tolley

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

  • Global accounting margin scheme
  • Excluded goods
  • Conditions
  • Using the scheme
  • Recovering VAT on purchases
  • Calculating VAT due
  • Scrap sales
  • Bulk purchases
  • Specific transactions
  • Books and records
  • More...

Global accounting margin scheme

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:

  1. buy / sell high volume, low value goods

  2. 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:

  1. aircraft

  2. boats (including outboard motors)

  3. caravans and motor caravans

  4. horses and ponies ― see the Margin scheme ― horses and ponies guidance note

  5. motor vehicles / motorcycles (excluding vehicles that have already been broken up for scrap) ― see the Margin scheme ― second hand motor vehicles guidance note

VATMARG03100; SI 1995/1268, Article 13


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

  1. the goods were not purchased on an invoice that shows VAT as a separate amount

  2. all individual items must have been obtained for a price of £500 or less

  3. the goods are not sold on a VAT invoice or similar document showing an amount as being VAT or as being attributable to VAT

  4. the business ensures that it keeps and retains all records and accounts specified by HMRC

SI 1995/1268, Article 13

Please note that global accounting can be used for imported works or art, etc even though VAT has been charged on their supply, acquisition (in Northern Ireland) or importation.

Using the scheme

If an existing business makes a decision to start using the scheme, it

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