Use our free VAT margin scheme calculator to check the VAT due on your margin and the amount left after VAT. It covers eligible second-hand goods, works of art, antiques and collectors’ items sold by VAT-registered businesses.
You can check a sale, find a selling price based on your target profit, or calculate VAT for a period using Global Accounting. Enter your figures in pounds and pence, and your results update as you type.
Box 7 assumes you bought the item in this VAT period. Leave margin scheme goods out of Boxes 8 and 9.
A calculation to help you, not tax advice. Follows HMRC's margin scheme guidance of 2 November 2026.
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How to Use Our VAT Margin Scheme Calculator for One Item
Follow these steps to check VAT on a single item or find a selling price based on the profit you want to keep.
Step 1: Select One item
Under How you account, select One item. This mode calculates each transaction separately.
Step 2: Enter the Purchase Price
Enter the full amount you paid the seller for the item. Keep later repairs, restoration and overheads separate, as these costs do not reduce the margin used to calculate VAT.
Step 3: Choose VAT on a sale or Price to charge
Select VAT on a sale if you already know the selling price.
If you want the calculator to suggest a selling price based on your target profit, choose Price to charge.
Step 4: Enter the Selling Price or Profit You Want to Keep
For VAT on a sale, enter the full VAT-inclusive selling price, including any part-exchange allowance.
For Price to charge, enter the profit you want to keep after margin VAT. This amount is before other business costs and taxes.
Step 5: Choose Standard, Reduced or Zero-Rated VAT
Choose the VAT treatment that applies to the goods. The calculator uses the following fraction of any positive margin:
Option
VAT calculation
Standard - 20%
Margin ÷ 6
Reduced - 5%
Margin ÷ 21
Zero-rated - 0%
No VAT
The margin already includes VAT, so standard-rate VAT is one-sixth of it. Taking 20% of the margin would overstate the VAT due. See HMRC’s margin calculation rules.
Step 6: Complete More options Where Applicable
Open More options to include an artist’s VAT, import VAT or a part-exchange allowance. The fields shown depend on how you bought the item.
Normal Purchases: Use the Full Purchase Price
Leave Normal selected when neither art option applies, and use the full purchase price.
If VAT appears separately on the purchase invoice, the item is ineligible unless a specific art exception applies.
From the artist: Enter the Price Before VAT and VAT Charged
Choose From the artist, then enter the price excluding VAT in the main field. Enter VAT the artist charged separately.
The calculator adds that VAT to your purchase cost. You cannot reclaim it when you use this treatment, as explained in HMRC’s rules for purchases from creators.
Imported art: Enter the Import Value and Import VAT Paid
Choose Imported art and enter the full customs value before the special reduced valuation used for import VAT.
Enter the import VAT you actually paid. If you leave this field blank, the calculator uses 5% of the value entered. It then adds the import VAT to your purchase cost.
This treatment requires written notification to HMRC and at least two years in the scheme. HMRC’s imported-art margin calculation guidance is under review, so confirm the treatment before relying on the result.
Enter Any Part-Exchange Allowance Given
Enter the allowance agreed with the buyer, keeping it included in the full selling price. A £2,000 cash payment plus a £500 trade-in means a £2,500 sale.
The £500 becomes the purchase price of the item received. It does not reduce the margin on the item you are selling.
Step 7: View Your Results
Your results update automatically as you enter or change your figures. Here is what each result shows.
Margin
Your margin is the selling price less the purchase cost. For example, a £2,000 sale less a £1,500 purchase gives a £500 margin.
If you sell at cost or at a loss, this card shows zero.
VAT to pay
At the standard rate, the £500 margin gives £83.33 VAT.
If the item sells at a loss, no VAT is due. That loss cannot reduce the VAT payable on another item.
Profit after VAT When Checking a Sale
The £500 margin less £83.33 VAT leaves £416.67 before other business costs and taxes.
If the item sells at a loss, this result shows the negative amount.
Price to charge and the “See this sale” Option
In Price to charge mode, this shows the suggested selling price based on your target profit.
Once the result appears, select See this sale to copy that price into the selling-price field and switch to VAT on a sale. You can then review the VAT and profit for that price.
VAT Comparison With and Without the Margin Scheme
For standard- and reduced-rated goods, the table compares margin scheme VAT with VAT included in the same full selling price.
You save shows the difference before any VAT you could reclaim on purchases.
Our margin VAT calculator can also use your eligible sales and purchase totals for a VAT period. Before entering your figures, check the £500 purchase limit per item and excluded goods in HMRC’s Global Accounting eligibility rules.
Step 1: Select Global Accounting
Select Global accounting under How you account. The calculator will show the inputs for your VAT period.
Step 2: Enter Sales this period
Enter the full selling prices of eligible goods sold during the VAT period, before deducting any margin VAT.
Step 3: Enter Purchases this period
Enter eligible purchases made during the same period, including stock you have not yet sold. Add opening stock and previous negative margins separately in Step 6.
Step 4: Choose Standard or Reduced-Rate VAT
Choose Standard for goods subject to 20% VAT or Reduced for goods subject to 5%.
Keep these totals separate and run a calculation for each rate. This calculator mode has no zero-rated option.
Step 5: Select Ongoing, First period or Leaving
Choose Ongoing for a continuing period. Select First period when you begin Global Accounting, or Leaving for your final period in the scheme.
Step 6: Enter the Adjustments for Your Selected Period
Your selection determines which of the following adjustment fields appear.
Ongoing or Leaving: Negative margin from last period
Enter the previous period’s shortfall as a positive amount. For a £1,000 negative margin, enter 1000. The calculator uses this amount to reduce the current period’s margin.
First period: Eligible Stock Brought Into the Scheme
Enter the purchase value of eligible stock you already hold when joining the scheme. Do not include the same stock again in Purchases this period.
Leaving: Stock Still on Hand at Cost and the VAT Limit Check
Enter your remaining unsold stock at purchase cost. The calculator checks the VAT on that stock against the £1,000 limit.
If the VAT exceeds £1,000, the full stock cost is added to sales. No closing-stock addition applies when that VAT is £1,000 or less. See HMRC’s closing-stock adjustment rules.
Step 7: View Your Global Accounting Results
Your results cover the selected VAT period, including any adjustments you entered.
Margin for the Period
This is your sales total, including any required closing-stock addition, less purchases, opening stock and negative margins brought forward.
If the calculation is negative, the margin card shows zero and the shortfall appears separately.
VAT to pay
Sales of £6,000, purchases of £3,000 and a £1,000 negative margin brought forward leave a £2,000 adjusted margin. Standard-rate VAT on that margin is £333.33.
Kept after VAT
This is the adjusted positive margin after VAT. It excludes other business costs and taxes and does not represent your accounting profit or cash available to withdraw.
Carry to next period When the Margin Is Negative
This replaces Kept after VAT when the calculation produces a negative margin.
For a continuing scheme, enter this amount in the next period’s Negative margin from last period field. It reduces the future margin; it is not a VAT repayment.
This period at a glance
The table brings together your sales, purchases and adjustments, followed by the resulting margin or shortfall.
The Breakdown Showing How the Margin Was Calculated
Expand See how it's worked out to check the additions, deductions and VAT fraction behind your results.
VAT Return Figures for Boxes 1, 6 and 7
Expand VAT return boxes for the period’s figures. Box 7 uses current-period purchases only, excluding opening stock and previous negative margins. When leaving, Box 6 also reflects any required closing-stock adjustment.
Limitations of Our VAT Margin Scheme Calculator
This calculator estimates VAT under the margin scheme. It is not a general margin calculator with VAT for standard retail pricing.
Eligibility: The calculator does not check whether your goods or transaction qualify. A result does not confirm that you can use the scheme.
VAT rates: Each calculation uses one rate. Keep stock with different VAT rates separate and calculate each category individually.
Costs and taxes: Profit and suggested prices exclude repairs, selling fees, overheads and taxes other than the VAT shown.
Records and returns: The results do not replace your stock book, invoices or a complete VAT return.
Negative amounts: Enter positive amounts only. For a negative margin brought forward, enter the shortfall in the designated field without a minus sign.
Rounding: VAT is rounded down to the nearest penny. Suggested selling prices can therefore differ from calculations that use unrounded figures.
Disclaimer
The results are estimates based on your figures and the assumptions on this page. They do not replace personalised tax advice from vat accountants or confirm that you meet HMRC’s requirements. Check your records, scheme eligibility and current HMRC guidance before setting prices or submitting a VAT return.
Need Help With Your Margin Scheme VAT?
Our VAT accounting services cover scheme advice, record keeping and preparing and filing your VAT returns.
Book a free initial consultation to discuss your margin scheme calculations and what your business needs.
The VAT margin scheme lets VAT-registered businesses pay VAT on the difference between an eligible item’s purchase and selling prices. It covers qualifying second-hand goods, works of art, antiques and collectors’ items.
Can you claim VAT on a margin scheme?
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You cannot reclaim VAT on an item sold to you under the margin scheme. You can still reclaim VAT on qualifying business costs, such as repairs and overheads, under the usual rules.
Rita writes practical accounting and tax guidance for business owners, drawing on her experience supporting businesses with accounts, tax and financial management.
