Hi,
I'm currently on the margin scheme and it makes me limited to sell used goods and was wondering if I can use the same vat for sell new goods with the full rate vat and reclaim the 20% vat or I can apply for another vat for full rate if possible?
Thanks in advance
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Replies (4)
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If you sell goods that are not on the margin scheme then you must charge 20% VAT. You can reclaim VAT on those purchases. The margin scheme is a concession to make life simpler for dealers in second hand goods.
@ Cam78 (OP).
The direct answer to your question is that one can indeed have two VAT schemes.
However, that answer is NOT really relevant to your case. You MUST operate “standard” VAT accounting, ie claim Input Tax and charge Output Tax, in the normal way, for all transactions to which the margin scheme has not been applied: hence there is no need to notify HMRC of anything.
As you will probably be aware, when you started to operate the margin scheme, there was NO REQUIREMENT to “register” the use of that scheme with HMRC. There is correspondingly no requirement to notify HMRC that you will apply standard VAT accounting to all OTHER transactions (ie transactions for which you will not operate the margin scheme).
[As a point of interest, there are many businesses which have operated standard VAT accounting alone (often for many years) but which, when exceptionally they acquire an item which qualifies for the margin scheme, they elect to operate that margin scheme on that one item: as mentioned above, there is no need for them to notify HMRC of their use of the margin scheme on that item].
Basil.
