The Book-keepers Forum (BKF)

Post Info TOPIC: VAT Margin Scheme and postage costs


Status: Offline
Posts: 8
VAT Margin Scheme and postage costs

We are using the VAT margin scheme for the second hand products we buy and sell.


We pay VAT on the difference between the buy price and sell price at 16.67%.


We are trying to get a better understand on how the postage fees should be accounted for.


  • If we purchase an item for £10 + £2 postage and packaging, can we log the VAT margin scheme buy price as £12 or £10? in this scenario the postage would be made via RoyalMail which means postage is non-vatable.

  • If we purchase an item for £10 + £2 postage and packaging and it is shipped by courier whose fees are applicable for VAT is the scenario different to the above?

  • If there are 2 items in one purchase, £10 each + £2 postage and packaging for both combined.
    We only sell one of the two items and would like to apply VAT Margin Scheme to this item.
    Should this be logged as £10 as the buy price for calculating VAT Margin Scheme or can this be logged as £12 or a portion of the postage for example 2 items purchase for postage £2, therefore £1 can be applied for this and the buy price of the item would be total £11 for calculating VAT Margin Scheme.

  • If we purchase a second hand goods item on ebay which is applicable for VAT Margin Scheme, and the seller sends the item by courier (not royal mail), can we claim back the VAT? We have not received a VAT invoice from this customer but the amount is a small amount.

  • If we purchase an item for £10 and sell an item for £50 and the postage cost we charge to our customer is £20 (posted via courier), what should we record the selling price as for VAT Margin Scheme purposes?
    In this example, we have received £70 from the customer (£50 + £20). Can this be recorded as £10 buy price, £70 selling price, therefore we should pay 16.67% on £60?
    Or should we calculate this as £10 buy price, £50 selling price, we should pay 16.67% of £40 and pay VAT at 20% for the £20 postage and packaging?


Thanks for your help and I look forward to the advice anyone can offer on this.


Master Book-keeper

Status: Offline
Posts: 8646

This is a forum for bookkeepers and Accountants, so we cannot answer your questions here.

This is exactly the sort of question you should ask your Accountant or I could recommend a VAT expert.

Be careful, postage is not 'non vatable'.



Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position

Page 1 of 1  sorted by
Quick Reply

Please log in to post quick replies.

Tweet this page Post to Digg Post to
Members Login
    Remember Me  

©2007-2019 The Book-keepers Forum (BKF). All Rights Reserved. The Book-keepers Forum (BKF) is a trading division of Bookcert Ltd. Registered in England Company Number 05782923. 2 Laurel House, 1 Station Rd, Worle, Weston-super-Mare, North Somerset, BS22 6AR, United Kingdom. The Book-keepers Forum and BKF are trademarks of Bookcert Ltd. This forum is a discussion forum only. There will usually be more than one opinion to any question and any posting should not be viewed as a definitive solution. No responsibility for loss occasioned to any person acting or refraining from action as a result of any posting on this site is accepted by the contributors or The Book-keepers Forum. In all cases, appropriate professional advice should be sought before making a decision. We reserve the right to remove any postings which are offensive, libellous, self-promoting or engaged in covert marketing. We will not notify users of removals. The views expressed in the forum posts are those of the individual and do not necessary reflect or agree with those of The Book-keepers Forum. Any offensive or unsuitable posts will be removed by the moderators. Any reader of this forum can request for a post to be looked into by sending an email to:

Privacy & Cookie Policy  About