The Margin Scheme is a special VAT scheme that can be used by businesses that sell second-hand goods. The scheme allows businesses to only charge VAT on the difference between the purchase price and the selling price of the goods. This can result in a lower overall price for the customer.
For example, if we buy collectible second-hand items from a private individual for £1,500 and sell them for £1,600 we would only have to charge VAT on the £100 margin.
Which Businesses can use the Margin Scheme?
To use the Margin Scheme, businesses must be VAT registered and Bleyer Bullion must meet certain other criteria including:
- The bullion must be second-hand.
- The bullion must be sold as a collectible.
- We must keep detailed records of all purchases and sales of bullion.
- We must work out VAT per individual sale so that we can pay the correct amount of tax – so it’s a bit more work for our accounts department.
Benefits to the Customer
There are a number of benefits to using the Margin Scheme for customers:
- You can save money on VAT. As mentioned above, the Scheme can save you money on VAT, as businesses only have to charge VAT on the margin.
- You can get a better deal on second-hand goods. Businesses that use the Scheme are often able to offer lower prices on second-hand goods. This because they do not have to factor in the full amount of VAT.
- It is easier to compare prices. When businesses use the Scheme, they are not allowed to display how much VAT they have included in the price of the goods. This makes it easier for customers to compare prices between different businesses.
Which Products are in the Margin Scheme?
Gold is not in the Margin Scheme as it is not subject to VAT in the UK. All the other metals that we sell – palladium, platinum, rhodium and silver are subject to VAT, so can benefit from the Scheme.
Additional Points
Here are some additional points to note about the Margin Scheme for bullion:
- Businesses cannot display how much VAT they have included in the price of the bullion.
- Customers cannot claim back any VAT on the purchase of bullion that has been sold under the Scheme.
- The Scheme does not tend to be suitable for company purchases as VAT cannot be claimed back.
Here To Help
If you’d like to speak to a member of our award-winning customer service team for some precious metal investment guidance, we’d be delighted to hear from you. Call us on 01769 618 618, or you can email us at sales@bleyer.co.uk, and we’ll get back to you asap.
