Free Tool for UK Dealers
Calculate VAT under the UK Margin Scheme instantly. Enter your purchase and selling prices to see the margin, VAT at 1/6, and your net profit.
Subtract the purchase price from the selling price. For example: bought at £500, sold at £800 — the margin is £300.
VAT under the Margin Scheme is 1/6 (16.67%) of the positive margin. On a £300 margin, VAT = £50. If the margin is zero or negative, no VAT is due.
Net profit is the margin minus VAT. On a £300 margin with £50 VAT, your net profit is £250.
The Margin Scheme applies when you buy eligible second-hand goods, works of art, antiques, or collectors' items from non-VAT-registered sellers — such as private individuals, estate sales, or other non-registered dealers.
If you buy from a VAT-registered seller and receive a VAT invoice, you must use standard VAT accounting for that item. You can reclaim the input VAT but must charge VAT on the full selling price.
Most dealers use both methods. Tracking which items qualify for which treatment is one of the trickiest parts of margin scheme compliance.
Stop calculating VAT manually. GemJam tracks purchase eligibility, calculates margin scheme VAT automatically, and generates HMRC-compliant reports. Join the waiting list for early access.