VAT margin scheme calculator, 2026/27
If you buy and resell second-hand goods, art, antiques or collectors' items, the margin scheme lets you account for VAT only on your profit margin. This calculator applies the scheme to your purchase and sale price for 2026/27.
The vat margin scheme calculator runs on the rates and thresholds HMRC has published for the 2026/27 tax year, so the figures you see reflect the position your company is actually filing on rather than a historic set of bands. Change any input and the result recalculates immediately, with no sign-up and nothing sent anywhere.
If you are a director of a UK limited company, use it as a first look before a decision rather than as the decision itself. VAT is calculated only on the margin (sale price less purchase price) using the VAT fraction of 1/6, rather than on the full selling price, in line with the second-hand goods, art, antiques and collectors' items margin scheme. Real company positions bring in other income, reliefs, group structures and prior year adjustments that a single page of inputs cannot see, which is why the workings are written out below under vat. Read those, then check the numbers against your own accounts, and speak to us if anything looks materially different from what you expected.
Last reviewed 12 September 2026 for the 2026/27 tax year. Reviewed by Waqas Sagar, Member of ICAEW, Fellow of ACCA, Fellow of AAT.
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Result, 2026/27
VAT due under the margin scheme
Gross margin (sale less purchase price)
VAT if charged on full sale price instead
Net profit after VAT and selling costs
Illustration only, figures are based on the rates you have selected and the information entered. Please check your own position with us before acting.
Estimates for the 2026/27 tax year using published GOV.UK rates. Switch between 2026/27 and 2025/26 above.
How this is calculated
The margin scheme lets a VAT-registered dealer in eligible second-hand goods, works of art, antiques or collectors' items account for VAT only on the difference between what they paid for an item and what they sold it for, rather than on the full selling price, avoiding double taxation on goods that have already borne VAT (or no VAT at all) when originally purchased new.
The margin is treated as VAT-inclusive, so the standard VAT fraction of one-sixth is applied to it to find the VAT due, equivalent to a 20% rate applied to the VAT-exclusive margin.
If an item is sold for less than it was bought for, there is no VAT to pay on that item, but under the standard, item-by-item margin scheme method, that loss cannot be used to reduce VAT due on profitable items; a global accounting scheme exists for certain lower-value goods that pools margins together instead.
Which goods qualify for the margin scheme
Eligible goods are broadly second-hand goods, antiques, works of art and collectors' items that you bought without VAT being charged to you, typically because the seller was not VAT registered, was themselves using the margin scheme, or the goods otherwise qualify. New goods, and goods on which you were charged and reclaimed VAT in full, cannot use the scheme for that transaction.
Common users include car dealers selling used vehicles, antique and art dealers, and second-hand goods retailers, each of whom would otherwise face VAT on their full turnover rather than their trading margin.
Records you must keep
HMRC requires a detailed stock book recording the purchase details, purchase price, sale details and sale price of each margin scheme item (or global totals under global accounting), since margin scheme VAT cannot be verified without this evidence in an inspection.
Invoices to customers under the margin scheme must not show a separate VAT amount, and should include a reference confirming the sale was made under the margin scheme.
What this means for your company
Treat the result as a planning figure for the 2026/27 tax year. If it changes what you were about to do, take a director's salary, a dividend, a large asset purchase or a filing decision, check it against your own accounts first. We can review the position with you and confirm the tax treatment before you commit.
Frequently asked questions
How is VAT calculated under the margin scheme?
VAT is due on the margin, the difference between your purchase price and selling price, not on the full selling price. The margin is treated as VAT-inclusive, so the VAT fraction of one-sixth is applied to find the VAT due.
What if I sell an item for less than I paid for it?
No VAT is due on that individual sale under the standard margin scheme method, but the loss cannot be set against VAT due on other profitable margin scheme sales unless you are using the global accounting method for eligible lower-value goods.
Can I use the margin scheme for any second-hand item?
Only for goods that qualify, broadly second-hand goods, antiques, art and collectors' items bought without VAT being charged to you. New goods, or goods on which you already reclaimed VAT, do not qualify for margin scheme treatment.
Do I show VAT separately on margin scheme invoices?
No, invoices for margin scheme sales must not show VAT separately; the VAT is accounted for internally based on your margin, and the invoice should instead reference that the sale was made under the applicable margin scheme.
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