VAT Second Margin Scheme v. Global Accounting Scheme


The Second Hand Margin Scheme and Global Accounting Scheme are similar in principle, with the Global scheme being a simplified version of the margin scheme.

VAT Global Accounting Scheme: An Overview

What are the Key Differences Between the Two Schemes

Although similar at a high level, there are differences between the second margin scheme and global scheme:

  1. Under the margin scheme you must work out the margin on each and every sale, whereas with the margin scheme you add up all eligible purchases and sales on a total basis quarter by quarter and take 1/6th of the total difference;
  2. With the Global Scheme you can include items on which you make a loss on whereas with the second hand margin scheme you cannot set the loss of one item against the profit of another;
  3. You cannot use the global accounting scheme for any individual item that you purchase for over £500 whereas there is no limit for the second hand margin schemes.

The VAT Global Scheme is suitable if you buy and sell in bulk and therefore unable to track individual sales.

VAT Margin Scheme for Second Hand Goods Businesses

Updated 11 April 2019

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