If you trade in second-hand goods, works of art, antiques and collectors’ items, you may be eligible to use the Margin Scheme. The Margin Scheme allows you to calculate VAT on the difference (or margin) between your buying price and your selling price. If no profit is made (because the purchase price exceeds the selling price) then no VAT is payable.
If you use the Margin Scheme there are special rules for completing boxes 1, 6, and 7 on the return is shown below (the rest of the boxes are completed in the normal way). If you also trade in goods and services outside the Margin Scheme you must account for those supplies on your return in the normal way (described in Section 3).
Box 1 VAT due on sales
Include the output VAT due on all eligible goods sold in the period covered by the return.
Box 6 total value of sales
Include the full selling price of all eligible goods sold in the period, less any VAT due on the margin.
Box 7 total value of purchases
Include the full purchase price of eligible goods bought in the period.
There is no requirement to include Margin Scheme purchases or sales in boxes 8 and 9 of your return.
Further information about the scheme is available in VAT Notice 718: https://www.gov.uk/vat-margin-schemes/vat-return