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bigduckontax
bigduckontax, Accountant
Category: Tax
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I am looking to import second hand luxury watches into the

Customer Question

I am looking to import second hand luxury watches into the UK for countries outside the UK such as Japan.
I understand that upon landing in the UK the items will be subject to [email protected]% and***@******.***%
If I register my business for VAT I understand I can reclaim the VAT on the purchased items.
When I resell the items I would then need to add VAT to the selling price however if I sign up for the margin scheme (which I believe second hand watches fall in to ) would instead of paying 20% on the total could I just pay 16% on the profit of the sale.
So what I need to know is -
1. Can I claim the VAT back on the purchased item ?
2. Can I sign up to the margin scheme and just pay 16% on the sales profit ?
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer and pleased to be able to help you with your question. On importation these items will be assessed by Customs for duty and VAT. The duty forms part of your cost of sales, but the VAT imposed is an input tax and can be reclaimed in the normal manner in your quarterly return. However, the margin scheme cannot be used for [source; HMRC guidance on the margin scheme]: 'You can’t use a margin scheme for:any item you bought for which you were charged VATprecious metalsinvestment goldprecious stones'Which rather limits your scope if Customs do charge VAT on import. I am so sorry to have to rain on your parade.
Customer: replied 1 year ago.
Thanks for answering so if I am charged VAT on importation I would not be allowed to register for the margin scheme?
Expert:  bigduckontax replied 1 year ago.
You could use the margin scheme for other purchases, but not for those listed in my earlier reply.
As I said it rather limits your scope.
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Expert:  bigduckontax replied 1 year ago.
Thank you for your support.

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