VAT Margin Scheme Calculator
Calculator
This calculator estimates VAT due under the margin scheme. Instead of charging VAT on the full selling price, VAT is calculated only on the profit margin.
This is commonly used in second-hand goods, antiques, and resale businesses where VAT is only applied to the difference between buying and selling price.
Formula: Margin = Sell − Buy, VAT = Margin × rate (if positive)
Result Explanation
The calculator shows your profit margin and the VAT due based on that margin.
How It Works
The calculator subtracts the purchase price from the selling price to find the margin. VAT is then applied only to that margin if it is positive.
Examples
Example 1: Buy £240, Sell £300 → Margin £60 → VAT £12
Example 2: Buy £170, Sell £150 → Margin -£20 → VAT £0
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FAQ
What is the VAT margin scheme?
VAT is applied only to profit, not total sale price.
How is VAT calculated?
Margin × VAT rate.
What if I make a loss?
No VAT is due.