How does VAT work for me as a Buyer?

Understanding the VAT Margin Scheme as a Buyer

What does it mean when I see "The above price is treated under a special VAT arrangement - margin scheme"?

When you come across this message, it's important for you, as a buyer, to understand how it impacts your purchase. The message indicates that the item you're interested in is being sold under a unique VAT arrangement called the "margin scheme." Here's what this means for you:

Who Does the VAT Margin Scheme Affect?

Buyers: As a buyer, nothing changes for you. It is required by local regulations that we make you aware of the VAT margin scheme when purchasing second-hand items. All items are in brand new condition, unused and in their original packaging. They are deemed second-hand as they are being re-sold.

Source of Goods: This scheme is typically applied when sellers are offering items they acquired from: a. Individual Sellers: The item you're considering was initially sold by an individual who didn't claim VAT when they purchased it. b. Other Resellers: The seller acquired the item from another reseller also using the margin scheme.

How Does the VAT Margin Scheme Impact You? Under the VAT margin scheme, the key idea is that VAT is calculated based on the profit margin earned by the seller, not the total selling price. Here's a simplified explanation of what this means for you:

Sales Price: This is the amount you pay for the item.

Purchase Price: The price at which the seller initially bought the item.

VAT Calculation: VAT is calculated only on the profit margin, which is the difference between the Sales Price and the Purchase Price.

VAT on Invoices:

It's important to note that, under the margin scheme, the precise VAT amount may not be separately listed on your invoice. This is because VAT is calculated based on the margin and cannot be reclaimed.

In summary, when you see the message about the VAT margin scheme, it means that the item you're interested in has a unique VAT calculation method. VAT is determined based on the seller's profit margin, not the full selling price. You may not see a detailed breakdown of VAT on your invoice because of this specific VAT arrangement.

For a deeper understanding or if you have specific questions about how the VAT margin scheme affects your purchase, we recommend consulting our comprehensive guide or reaching out to our customer support team for further assistance.

Learn more at the help center: Margin Scheme Guide

We hope this helps clarify how the VAT margin scheme affects your purchase as a buyer. If you have any more questions, please feel free to contact us for further assistance.