We have recently registered for VAT and sell second-hand goods so they fall into either Global or Margin VAT (depending on stock cost price). When we do our VAT returns we calculate the following for the Global…
a. Negative margin from previous period (as we had a lot of opening stock initially)
b. Total Purchases for the period
c. Total sales for the period (excluding zero-rated sales)
d. Margin = c – (a+b)
Some of our sales are zero-rated (as they are exported abroad) and as such they are excluded from the sales figure in step C. The part which is not clear is whether the stock cost price of the products sold should then be retrospectively applied to the Negative margin/Opening Stock? I’ve read all of the information available and cannot find an answer for this so believe it does not apply.