VAT Margin Calculator
The VAT margin scheme applies to second-hand goods, antiques and works of art. Instead of charging VAT on the full sale price, you only pay VAT on the margin — the difference between what you paid and what you sold for.
Enter the gross purchase and selling prices to see your VAT liability.
How the calculation works
We believe numbers should be transparent. Here is the formula behind this calculator.
Worked example
Worked example: bought at £8,000, sold at £10,000
Important assumptions
- Both prices are entered including VAT, as they are for second-hand purchases and sales.
- Under the margin scheme you cannot show VAT separately on the invoice.
- A standard sale at £10,000 would carry £1,667 VAT — the margin scheme charges only on your £2,000 margin.
Rates & official sources
Every calculation is based on the official rates and rules published by GOV.UK and HMRC.
Frequently asked questions
When can I use the margin scheme?
For second-hand goods, antiques, collectables and works of art bought for resale. You generally cannot use it for new goods. You must meet the conditions and account for VAT correctly on your return.
Can I use the margin scheme on every sale?
No — you can choose per item whether to use the scheme, and some sales (for example goods you imported yourself) do not qualify. Keep clear records for each item.
What happens if I sell for less than I paid?
You make a loss on that item, so there is no margin and no VAT to pay. You cannot offset that loss against the margin on other items.
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View calculatorRelated guides
New to the topic? Read a plain-English guide on vat, with worked examples and tips.
These calculations are estimates for guidance only and are not professional financial, tax or legal advice. UK rates and rules change, so always verify important figures with official GOV.UK / HMRC information or speak to a qualified professional. See our full disclaimer.