Second-hand goods VAT calculation query

[Football Fan]

Hi. I am just after some clarification about the issue of VAT on second-hands goods.
If I buy a second-hand item for £10 and sell it for £25 plus £2 postage. Do I calculate the VAT payable, inclusive of the postage; so the amount to be used for calculating VAT under the scheme would be £17 [ 25+2-10] .
The VAT element of this £17 would be £2.83, so my net income, after VAT, for my records, would be £27- £2.83 = £24.17.
Have I got all this correct, or am I missing something?

Also, does anyone know if shop soiled and customer return clothing, purchased directly from a factory store, would be classed as second-hand goods?

I would be most grateful for any responses. Many thanks:|

 

[David Griffiths]

1 - yes you calculate on the gross receipts, including postage

2 - if the factory store is VAT registered - and surely it must be - then you cannot apply the margin scheme. Get a VAT invoice and use normal VAT accounting

 

[Football Fan]

Many thanks, I just needed some reassurance that I was working the VAT out properly.

Yes, the factory store is VAT registered. It was just the issue of whether a customer returned item which, was resold again, counted as second hand goods.
Much obliged for the clarification.