The VAT Margin scheme is where VAT is not charged in a conventional way.
Under the margin schemes, VAT is calculated on the profit margin i.e., on the difference between the cost of acquiring an item and its sale price rather than on the full selling price.
https://www.gov.uk/guidance/the-margin-and-global-accounting-scheme-vat-notice-718
Without the margin scheme the business would have to account for VAT on the full selling price of each item. If an item is sold for less than was paid for it, then no VAT is due on the sale.
The eligible goods are:
If you are looking to know more about how the scheme works, please get in touch with us.