Dealers' margin schemes
A dealer's margin scheme is an optional method of accounting which allows a dealer to calculate VAT on the value added to the goods they sell (the difference between the price they paid for an item and the price it is sold for), rather than on the full selling price. Items covered include second-hand goods, works of art, antiques and collectors' items.
Dealers can only apply the margin scheme to an item when they have either:
- bought the goods from a private individual or an unregistered business which does not have to charge VAT on them, or
- bought the goods from another business which has also sold them on under a margin scheme.
An item sold to you under a dealer's' margin scheme will not affect the total price that you pay. Any items sold in village-on-the-web using a dealer's margin scheme will be marked accordingly on your invoice. It only affects you if you are a VAT registered buyer, as you will not be able to claim back the VAT content of this purchase as none will be shown on your invoice.
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