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VAT Margin Scheme and Exempt Suppliers

VAT Margin Scheme and Exempt Suppliers


I have a question I have been googling for weeks now.

VAT MArgin Scheme - As we now have started purchasing goods in order to refurbish and sell back to consumer these items fall under VAT MArgin Scheme (Second Hand consumer goods), i.e bought unit for £100 sold for £200 exc VAT, VAT is now only applicable on Difference between Purchase and Sale Price.

The issue is how to incorporate these Sales within our Sage Accounts PAckage.  Currently devised excel spreadhseet to manage the stock.  Stock is also included within Sage as well.  How are these transaction incorporated into Sage so VAT is included correctly.

Also querying concerns baout buying goods form companies exempt from VAT due to item sbeing shipped in from JErsey, Guernsey etc.  We purchased over 100 units at £4 and each was sold for £12.  These figures were includes on SOP and POP within Sage and VAT accountable on £12 for each unit.  VAT not reclaimed bevacuse tax code was T0.

In instances such as this as goods aren't Second Hand they just are exempt Form VAT becuase of location goods are shipped from, can these trascations be included in MArgin Scheme due to no VAT being included in original purchase.

Anyone give me some pointers, much appreciated


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04th Sep 2010 12:49


Since Sage itself does not handle the VAT margin scheme, it may increase your work to try and get it to, particularly if you are already using an Excel spreadsheet to for the required Stock Book.

Also, you will not know the VAT % until you make a sale (unless you sell everything at exactly the same margin), so you may not be able to apply a global VAT percentage to your sales in Sage. If this is the case, you could struggle to take full advantage of the interaction/flow between Stock/SOP/Sales Invoicing in Sage.

It might be easier to do the VAT calculations in Excel, as your Stock Book is already there and import or journal the required sales information into Sage from there. (The purchases would still go into Sage.)
If you set it up well (and use the correct VAT codes and amounts), you could still do the VAT returns in Sage, to take advantage of it’s VAT reconciliation function and to keep your control accounts in line.

The other option might be to try and find a bolt-on to Sage that handles the VAT Margin Scheme (there are some for the Auto trade, but I’ve not looked at any other options)

Regarding the imports from the Channel Islands being included in the VAT Margin Scheme:
The first question would be: are those goods actually eligible?
You’ve already said they are not second-hand goods. So, are they works of art or Antiques and collectors’ items or otherwise eligible under the Margin scheme??

(If the goods aren’t eligible under the Margin schem, you can still use standard VAT accounting for those sales.


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26th Jun 2011 12:32

marginal scheme in sage

i know this old post but i was looking for same thing, you can do marginal scheme in sage, i have found step by step guide here.


Furqan 07979927762

-- Accountant and Tax Consultants in Leeds


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26th Jun 2011 13:56

Yes but...
you would still have to calculate the actual output VAT manually, as Sage won't do this automatically (unless you have a bolt on).
as the blog says: "...Once you have obtained the VAT figures, you can either manually add them to the box 1 and 4 figures on the VAT Return produced by Sage Accounts, or you can post a journal to add the box 1 figure into your VAT Return the next time it is calculated..."
And at some point, you would still have to manually journal the VAT in Sage.

As the volume of sales/products increases, altering product records for each sale, as per the blog post, could become quite cumbersome (particularly if every product sells for a different margin).


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14th May 2012 19:46

LimeDB v3


LimeDB v3 has just been released which includes full support for VAT margin schemes.

Drop me an email if you would like to have a look at it.

Kind Regards


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