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Margin scheme ― overview

VAT margin schemes tax the difference between the price paid for an item and what it is sold for, rather than the full selling price. VAT is paid at one-sixth of the difference. Using a margin scheme is optional and business can use normal VAT accounting if that produces a favourable outcome. More detail on the VAT margin scheme can be found in Operating the margin scheme.

There are special rules in place when the margin scheme is used for houseboats and caravans, and therefore, businesses making supplies of this type need to be aware of the additional rules.

Margin scheme ― when can it be used for houseboats and caravans?

A margin scheme can be used when a business sells:

1. •

   second-hand boats, houseboats and caravans