Vat scheme on secondhand goods

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Vat scheme on secondhand goods

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franco

Joined: 05 Nov 2004
Posts: 113
Location: Bolton, Lancashire

Posted: Mon Jul 30, 07 7:30 pm Post subject: Vat scheme on secondhand goods
can anyone give me a simple explanation on how can be charged on secondhand goods? I believe there is a 'margin' scheme whereby VAT is only charged on the profit. Franco

RichardW

Joined: 24 Aug 2006
Posts: 8443
Location: Llyn Peninsular North Wales

Posted: Mon Jul 30, 07 8:08 pm Post subject:
I think you are right. VAT should only be charged on the markup you add not the full price. Most second hand sellers charge VAT on the full amount so making extra cash. Justme

dougal

Joined: 15 Jan 2005
Posts: 7184
Location: South Kent

Posted: Mon Jul 30, 07 8:09 pm Post subject:
Just so. Sometimes called the antique dealer's scheme. Buying from and selling to non-vat-reg people. Just charge the vat on the difference between buying and selling prices. But appropriate (special) records need to be kept... f-u-l-l details as a PDF https://customs.hmrc.gov.uk/channelsPortalWebApp/downloadFile?contentID=HMCE_CL_000145

franco

Joined: 05 Nov 2004
Posts: 113
Location: Bolton, Lancashire

Posted: Mon Jul 30, 07 8:11 pm Post subject:
So in theory the customer can work out your margin?? Franco

dougal

Joined: 15 Jan 2005
Posts: 7184
Location: South Kent

Posted: Mon Jul 30, 07 8:28 pm Post subject:

franco wrote:

So in theory the customer can work out your margin??

Franco

C'mon, you haven't looked at Page 11 (&12) of the PDF "3.7 What details must I include on sales invoices", now have you?

I didn't go with the scheme 'cos I was selling to a mix of vat & non-vat people -- and (at least then) you had to put something you've bought into a stockbook when purchased, in order to sell it on the scheme. I didn't know, and didn't want to lock-in, what class of customer might end up buying the thing. Too inflexible, so not for me.

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