What’s the difference between the Margin Scheme and Standard VAT?

VAT could be confusing enough! Most people will not have heard of the VAT Margin Scheme, and will only be aware of the more common form of VAT - Standard VAT. Hopefully the explanation beneath clears things up for you.

  • What is standard VAT? Goods sold on this includes the 20% VAT & if you’re a VAT registered business you may be able to claim this back. 
  • What is the VAT Margin Scheme? This is frequently used for second hand goods / refurbished products - where the price you see includes the VAT, but the VAT cannot be claimed back, nor displayed separately on the invoice. 

How do I know which one it's sold on? The item description will confirm which VAT an item is sold on.

How does the VAT Margin Scheme affect you? If you’re a consumer, then it doesn’t affect you at all! The price you see is the price you pay. If you're a VAT registered businesses (or other such organisation that could normally claim back the VAT on eligible purchases), then you will not be able to claim back the VAT on the goods sold on the VAT margin scheme.

You might sometimes find it more economical to buy the same product on the Standard VAT scheme.We recognise that businesses (B2B), and household consumers (B2C) often need different products. As a result, we’re gradually stocking more business focused laptops on the Standard VAT scheme, whilst keeping the VAT margin scheme range for the consumers.