VAT margin scheme

[Psm1975]

I’m selling my T5.1 and buying a T6.1. Most of those for sale are plus VAT.

I stumbled across an article on the .gov website that talks about the VAT Margin Scheme. In essence you pay 16.66% VAT on the profit the dealer is making, instead of 20% of the value of the vehicle.
There are certain stipulations, but if buying a used van as an individual it seems too obvious not to be looked into.

Using the VAT margin scheme for second-hand vehicles

Find out how to use a margin scheme to account for VAT if you buy or sell second-hand vehicles (VAT Notice 718/1).

www.gov.uk

Had anyone had any experience of this, or am I missing something obvious?

 

[z1ts]

Obviously only works if you are VAT registered...

 

[archersam]

Obviously only works if you are VAT registered...

and in which case doesnt matter if you pay 16.66 or 20 as you claim it all back.

 

[Andyf]

Margin scheme was a flat rate across every thing
You didn’t claim anything back but only payed the 16 percent flat rate on all

 

[archersam]

Margin scheme was a flat rate across every thing
You didn’t claim anything back but only payed the 16 percent flat rate on all

ah never heard it called that, I only knew it as the flat rate scheme and used to do quite nicely out of it as a day rate consultant with hardly any VAT related outgoings. LOL

 

[Andyf]

@archersam
Yes that’s what they called it, totally forgot the name

 

[Psm1975]

Thanks for the replies. I didn’t realise it was all to do with someone that was VAT registered!