VATP002 - VAT Public Clarification on the profit margin scheme - eligible goods

VAT Public Clarification VATP002 provides details which goods are considered to be eligible for application of the profit margin scheme.

The profit margin scheme allows VAT to be accounted for by second-hand goods dealers on the profit made on the supply only, rather than the whole value, provided certain conditions are met.

VATP002 confirms that only those goods which have been previously subject to VAT qualify under the profit margin scheme. 

Businesses  should ensure they have sufficient records in place to identify those goods qualifying to be supplied under the profit margin scheme and those goods on which they must account for VAT on the full selling price.