The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
This guidance note provides an overview of the margin schemes that businesses may wish to use in respect of sales of the following second hand items:
VATA 1994, s 50A; VAT (Special Provisions) Order, SI 1995/1268 ; De Voil V3.532 (subscription sensitive); Notice 718 The VAT Margin Scheme and global accounting ; 2006/112/EEC , Articles 312 - 341; VATMARG02000
This note should be read in conjunction with the following guidance notes:
It should be noted that using the scheme is not compulsory and goods eligible for the scheme can still be sold outside the scheme in the normal way even if they were purchased from a seller using the scheme. Also, if an eligible item is sold but all the conditions of the scheme are not met, the margin scheme cannot be used and the sale must be dealt with outside the scheme in the normal way.
Margin schemes are an optional VAT accounting methods that can be adopted by relevant businesses. The output tax due is calculated on the margin made on the goods rather than the full selling price.
There are three margin schemes currently in operation which are:
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