Value Added Tax Act 1994 section 50A

Margin schemes

Section 50A(5), as modified by Schedule 9ZA paragraph 26, extends the scope of margin scheme provisions so that they apply to acquisitions as well as supplies.

• Section 50A allows the Treasury to make orders providing for margin schemes, under which VAT is charged only on the profit margin rather than the full selling price.
• Schedule 9ZA paragraph 26 modifies section 50A(5) by inserting the word "acquisition" after "supply," so that margin scheme rules explicitly cover acquisitions in addition to supplies.
• This means that where goods are acquired (for example, brought into the UK from abroad) and then sold under a margin scheme, the margin scheme treatment can apply to the acquisition as well.
• The practical effect is that businesses using margin schemes do not need to treat acquisitions differently from supplies when applying the scheme rules.