VAT Margin Scheme Question help! :)

Discussion in 'Accounts & Finance' started by JakeEG, Jan 13, 2021.

  1. JakeEG

    JakeEG UKBF Newcomer Free Member

    1 0
    Hello!

    I was wondering if anyone had the knowledge to help me answer what should be a simple question that I am receiving conflicting answer for from various people.

    I currently sell second hand clothing and I am on the flat rate scheme, I want to go over to the margin scheme but firstly to know weather it is beneficial to me I need to answer this question.

    When working out the 16.67% Margin for instance which of these two situations would I work it out from?

    A.
    Purchase price £50
    Sale price £100
    Profit £50 - Margin Vat worked out on £50

    or

    B.
    Purchase Price £50
    Sale Price £100
    Profit £50
    Out goings
    - 10% app fee (from Sale total)
    - 4% PayPal fee (from sale total
    Margin vat worked out on £36 (profit after out goings)

    Any help is much appreciated thank you!!
     
    Posted: Jan 13, 2021 By: JakeEG Member since: Jan 13, 2021
    #1
  2. Scalloway

    Scalloway UKBF Legend Free Member

    16,770 3,561
    I would use the £50. Fees will have VAT calculated separately if applicable.
     
    Posted: Jan 13, 2021 By: Scalloway Member since: Jun 6, 2010
    #2