Value Added Tax Act 1994 section 50A

Margin schemes

Section 50A provides for VAT to be charged on the profit margin of certain supplies rather than on the full selling price, under schemes established by Treasury order.

• Eligible supplies include works of art, antiques, collectors' items, motor vehicles, second-hand goods, and goods supplied through an agent acting in his own name
• The profit margin is the difference between the purchase price and the selling price, and VAT is charged on that margin instead of the full value of the supply
• An alternative global accounting method allows all purchases and sales of a particular type of goods within a VAT period to be aggregated, with any negative margin carried forward to the next period
• Agency commissions connected with a supply of goods may be folded into the margin calculation rather than being subject to VAT separately as a supply of services