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)
The calculator shows your profit margin and the VAT due based on that margin.
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.
Example 1: Buy £240, Sell £300 → Margin £60 → VAT £12
Example 2: Buy £170, Sell £150 → Margin -£20 → VAT £0
VAT is applied only to profit, not total sale price.
Margin × VAT rate.
No VAT is due.