How to Use This Calculator
Our VAT Margin Calculator is designed to be straightforward and easy to use. Follow the steps below to quickly calculate VAT due under the Margin Scheme for your items.
Step 1: Enter Item Details
For each item you want to calculate VAT for:
- Purchase Price (£): Enter the amount you paid for the item. If you received the item without payment (e.g., as a part-exchange), enter 0.
- Selling Price (£): Enter the amount you're selling the item for (including VAT).
- Other Costs (£): Enter any additional costs associated with the item, such as repairs, cleaning, or restoration. If there are no additional costs, enter 0.
Tip: Make sure to use the correct purchase price. This should be the price you paid excluding any VAT that you've reclaimed or will reclaim. For goods purchased from private individuals or non-VAT registered businesses, use the full purchase price.
Step 2: Add Multiple Items (Optional)
If you want to calculate VAT for multiple items:
- Click the "Add Another Item" button at the bottom of the form.
- A new item section will appear where you can enter details for another item.
- Repeat this process for each additional item you want to calculate.
Tip: You can remove items by clicking the "Remove Item" button on each item card (except for the first item).
Step 3: Calculate VAT
- Once you've entered all your items, click the "Calculate VAT" button.
- The results will appear in a grid below the form, showing each item's margin, VAT due, other costs, and profit.
- A total summary will also be displayed, showing the combined figures for all items.
Tip: The calculator will only apply VAT to positive margins. If an item's selling price is less than its purchase price, no VAT will be due for that item.
Step 4: Interpret the Results
For each item, the calculator shows:
- Margin: The difference between the selling price and purchase price.
- VAT Due: The amount of VAT payable (calculated as margin ÷ 6).
- Other Costs: The additional costs you entered.
- Profit: The net profit after subtracting VAT and other costs from the margin.
Tip: The VAT due is calculated at 16.67% of the margin (equivalent to dividing by 6), as per HMRC's Margin Scheme rules.
Step 5: Reset or Modify (Optional)
If you need to start over or make changes:
- Click "Reset Calculator" to clear all data and start fresh.
- Alternatively, you can modify any of the values directly and click "Calculate VAT" again to update the results.
Worked Example
Example: Antique Shop with Multiple Items
Let's say you own an antique shop and have the following items to calculate VAT for:
Item 1: Victorian Desk
- Purchase Price: £350
- Selling Price: £600
- Other Costs: £50 (restoration and polishing)
Item 2: Art Deco Lamp
- Purchase Price: £80
- Selling Price: £195
- Other Costs: £15 (rewiring)
Calculation Process:
Item 1 (Victorian Desk):
- Margin: £600 - £350 = £250
- VAT Due: £250 ÷ 6 = £41.67
- Profit after VAT and costs: £250 - £41.67 - £50 = £158.33
Item 2 (Art Deco Lamp):
- Margin: £195 - £80 = £115
- VAT Due: £115 ÷ 6 = £19.17
- Profit after VAT and costs: £115 - £19.17 - £15 = £80.83
Totals:
- Total Margin: £250 + £115 = £365
- Total VAT Due: £41.67 + £19.17 = £60.84
- Total Other Costs: £50 + £15 = £65
- Total Profit: £158.33 + £80.83 = £239.16
This is the amount you would need to account for on your VAT return under the Margin Scheme.