VAT margin scheme invoice query

[swankypants69]

I understand basic principles of VAT as a VAT registered business

If I as a VAT registered business, buy a secondhand item from a trader who is operating on the margin scheme, where in my understanding they pay HMRC VAT on the profit of the transaction, do they detail the VAT element on their invoice to me?

This would feel odd as they would then in effect be telling me their margin!

Any answers?

 

[StevensOnln1]

A trader selling goods under a margin scheme cannot issue a VAT invoice so you would be unable to recover any VAT on goods purchased from them.

 

[swankypants69]

That makes sense thanks

Not something I've come across before so I can file that in my brain now!

 

[faradaykeynes]

This should help , rules for Margin Scheme invoices

 

[David Griffiths]

The trader that you are buying from does not have to use the margin scheme for all transactions. It is quite possible for them to treat the sale as a "normal" transaction and issue an invoice to you charging VAT on the full sale price. You would be able to recover the input tax in the normal way.

It might be possible to get a small reduction in the invoice price this way, depending on the markup that's been applied - not that they are likely to tell you that of course. Otherwise it's six of one and half a dozen of the other