Buying and selling goods in Northern Ireland using the VAT margin scheme
If you buy and sell goods between Northern Ireland and the EU or between Great Britain and Northern Ireland check how to use the VAT margin scheme (VAT Notice 718).
There are special rules if you buy and sell goods between Northern Ireland and the EU and between Great Britain (England, Scotland and Wales) and Northern Ireland.
General rules
Second-hand goods that are purchased within Northern Ireland can be sold under the margin scheme using the normal rules. The rules are set out in the VAT margin scheme guidance.
Buying goods from Great Britain to sell in Northern Ireland
Second-hand goods sourced in Great Britain are not normally eligible to be resold in Northern Ireland under the margin scheme.
The exceptions are for:
- works of art
- antiques
- collectors’ items
For more information on the treatment of these goods, read VAT margin scheme for imported works of art, antiques and collectors items.
Motor vehicles
Motor vehicles sourced in Great Britain for resale in Northern Ireland can no longer use the margin scheme.
Vehicles moved on or after 1 May 2023 may be eligible for the second-hand motor vehicle payment scheme.
Selling from Northern Ireland to Great Britain
Normal margin scheme rules still apply.
Buying goods from the EU to sell in Northern Ireland
Buying goods from a private individual in the EU
These are treated in the same way as goods sourced within Northern Ireland. The normal margin scheme rules apply for eligibility, invoicing, record keeping and accounting.
Buying goods from an EU VAT-registered business
Margin scheme invoices must include one of the following indications:
- a reference to Articles 313, 326 or 333 of the EC VAT Directive 2006/112/EC
- a reference to the corresponding part of the relevant national VAT legislation
- another declaration to indicate that the goods have been sold under a margin scheme
If your purchase invoice shows margin scheme indications
You may receive an invoice for a supply from an EU member state which shows one of the margin scheme indications. If so, you can enter the details into your scheme records if you’re sure that the supply is made under a margin scheme.
If your purchase invoice shows a VAT number
If your purchase invoice shows your VAT number but does not show one of the margin scheme indications, then it’s likely that the goods have not been supplied under a margin scheme.
Before entering the details into your records, check with your supplier to confirm if their supply was made under a margin scheme.
Goods not eligible for the margin scheme should be treated as an acquisition. Read VAT on movements of goods between Northern Ireland and the EU for further information.
Selling goods from Northern Ireland to an EU member state
Margin scheme sales from Northern Ireland to an EU member state are treated the same way as margin scheme sales within Northern Ireland.
This means that VAT is due on the margin, and you must
- issue a normal margin scheme sales invoice
- keep a copy in your VAT margin scheme records
Selling goods to an EU VAT-registered business
If you’re selling goods under the scheme, you do not need to obtain that business’s VAT registration number.
You can treat the sale outside the margin scheme if the dealer agrees. If you do that, you can zero rate the sale under the normal rules for the movement of goods from Northern Ireland to the EU. Read VAT on movements of goods between Northern Ireland and the EU for more information.
If you ship goods via Great Britain
You can still use the margin scheme if goods are shipped to the EU via Great Britain.
Transfer of your own goods
The transfer of goods within the same legal entity between Northern Ireland and an EU member state is deemed to be a supply of goods for VAT purposes.
You may have transferred your own goods under a VAT margin scheme to an EU member state at the price which you bought them.
If so, you will not have to account for:
- any VAT on the transfer in the UK
- acquisition VAT in the member state
If you sell the goods on after you transferred them, that sale will be subject to the VAT rules of the member state in which you make the sale.
Buying and selling a new means of transport
Any new means of transport that you purchase from, or sell to, an EU member state will not be eligible for a margin scheme. New means of transport are always liable to VAT in the country of destination.
New means of transport has a technical meaning described in Account for VAT on a new means of transport (VAT Notice 728).
EC Sales Lists and Intrastat
You do not have to complete EC Sales Lists and Intrastat for margin scheme supplies.
EC Sales Lists
EC Sales Lists are for reporting sales by VAT-registered businesses from one EU member state to another.
You must complete EC Sales lists for their EU supplies if you are a VAT-registered businesses in the UK that:
- makes supplies of goods from Northern Ireland
- makes supplies to VAT-registered businesses in EU member states
You should not include any margin scheme transactions on an EC Sales List because they’ll be subject to VAT in the UK and therefore not eligible for zero rating.
Intrastat
Intrastat is the system for collecting statistics on the trade in goods between EU member states. As margin scheme goods are subject to VAT in the country of origin, you do not need to:
- include margin scheme purchases or sales in your VAT return
- complete a supplementary declaration
How to work out the margin and VAT due
You should calculate the margin and VAT due using the normal margin scheme rules.
Records to keep
You should keep the normal VAT margin scheme records.
VAT returns
You must show any goods you buy or sell using a margin scheme on your VAT return.