VAT Margin Scheme and EC Intra-Community Supplies

VAT Margin Scheme and EC Intra-Community Supplies

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I'd be very, very grateful for any help or advice on this as I'm tearing my hair out!

My client buys and sells art using the VAT Margin Scheme. He bought a painting from a VAT-registered gallery in Germany, who have asked for his VAT number but given him an invoice which is 'zero-rated' for VAT - there is no separate VAT amount shown on the invoice. This is classed as an Intra Community Supply and benefits the seller because they don't have to pay VAT on the sale.

My question is, is there any way that this painting can now be re-sold on the Margin Scheme? My understanding is that my client has to pay the 20% VAT due on the purchase and can then re-claim it again ('EC Acquisition"), but is then no longer eligible to use the Margin scheme to re-sell.

I have heard that some UK galleries work by NOT reclaiming the VAT, meaning the item is still eligible for sale on the Margin Scheme.

Hope this makes sense...THANK YOU!

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