Vintro Pro
NL · FR · EN
Vintro Pro
NL · FR · EN
For the margin scheme a bicycle is ordinary second-hand goods. The question sits in the workshop, not at the till.
A second-hand bicycle is margin goods — as long as it stays the same bicycle.
Second-hand bicycles fall under the margin scheme. A bicycle you build up from loose parts falls outside it in Belgium; in the UK, global accounting can take it.
In the UK a bicycle is ordinary second-hand goods under article 2 of the Value Added Tax (Special Provisions) Order 1995: tangible movable property suitable for further use as it is or after repair. Unlike motor vehicles, it is not shut out of global accounting by article 13(2). Belgium’s FPS Finance lists second-hand means of transport separately — motorised land vehicles, boats and aircraft — and the bicycle is not among them either.
The question that really matters for bicycles comes out of the workshop. A second-hand bike shop often buys in bulk, strips some for parts and puts other bikes back on the road with them.
A bicycle you buy from a private individual, fix up and resell is second-hand goods usable again after repair. That is exactly the definition in article 2 of the 1995 Order.
A brake pad, a chain or a new tyre changes nothing there. Repair is written into the definition of second-hand goods.
Article 2 of the Value Added Tax (Special Provisions) Order 1995 defines second-hand goods as “tangible movable property that is suitable for further use as it is or after repair, other than motor cars, works of art, collectors’ items or antiques and other than precious metals and precious stones”. Article 12(2) opens the margin scheme to “works of art, antiques and collectors’ items” and “second-hand goods”.
That is the whole test, and it is a test about the goods, not about your trade. The power to charge VAT on the profit margin sits in section 50A of the VAT Act 1994, which also names motor vehicles separately. Article 12(3) of the 1995 Order adds the purchase side: you must have taken possession of the goods on a supply on which no VAT was chargeable, or on another margin-scheme sale. gov.uk (VAT margin schemes) puts it plainly: you cannot use a margin scheme for “any item you bought for which you were charged VAT”. Belgium, which follows the EU VAT Directive, keeps its own exclusion list: FPS Finance names new goods, precious metals, precious stones and pearls, renovated goods, goods consumed on first use and goods that cannot be used again in the same state, under article 58, § 4 of the Belgian VAT Code and Royal Decree no. 53 of 23 December 1994. The four-country panel below shows where that changes the answer.
The example is a refurbished city bike: bought for €60.00, sold for €210.00. Put your own figures in.
Sold at a loss: no margin on this item, so no VAT. In the UK you work item by item: the loss counts as zero and gives you nothing back.
The VAT is inside the margin, not on top of it. That is the mistake this calculator is built to prevent: 20% on this example’s margin of 150 is 30.00, while in the UK you owe one-sixth, 25.00 — the 16.67% gov.uk quotes. At Belgium’s 21%, the same mistake turns €26.03 into €31.50. How to do this across a whole return period — and why France calculates piece by piece by law — is set out in How do you calculate margin VAT?
In the UK the workshop has more room than in Belgium. gov.uk’s global accounting guidance lets you split collections and sell the items separately, and combine two or more items to produce one item for resale. HMRC’s manual lets you break up an item bought for more than £500 and sell the parts under global accounting, as long as each part was worth less than £500 (VATMARG03300). What it rules out is turning eligible goods into something no longer eligible, such as scrap melted down into metal bars.
Belgium is stricter. FPS Finance excludes goods that can no longer be used in the same state and goods processed so heavily that at the point of sale you can no longer establish this is the same piece: there, a bike built from three wrecks is no longer the bike you bought.
A new battery bought and resold separately is no margin goods anywhere: it came with VAT, and gov.uk excludes any item you bought for which you were charged VAT.
In the UK, whether bicycles fall under the scheme is a matter of UK law: HMRC runs its own margin schemes under section 50A of the VAT Act 1994. Belgium, the Netherlands and France all follow the same EU VAT Directive (2006/112/EC). Each country interprets the rules itself; where that makes a difference for bicycles, this page says so. The rate and the calculation method always differ.
Margin across the whole return period. Article 58, § 4 VAT Code and RD no. 53.
Per period by default (global accounting, Uitvoeringsbesluit OB 1968, art. 4c(1)). You can opt out in writing to the inspector, for at least five years.
Legally piece by piece, but globalisation per period is allowed, with no prior election. CGI art. 297 A; BOFiP § 260.
HMRC’s own scheme, outside the EU. Below the registration threshold you pay nothing.
In the UK that can work under global accounting, provided each part’s purchase value stays under £500 (VATMARG03300). In Belgium, goods out of use are on the exclusion list.
The margin is selling price minus purchase price. A new €18 chain does not lower your margin.
With a batch of ten bikes for one amount, you either show the split in your stockbook or use global accounting, where the margin is total sales minus total purchases per VAT period (article 13 of the 1995 Order). An estimate after the fact is neither.
In the UK, combining items into one bike only works under global accounting. In Belgium a bicycle that comes into being out of loose parts is not the goods you bought — so not margin goods.
This is an explanation, not tax advice. Whether the margin scheme is the right choice in your case, and how to enter it in your return, is a question for your accountant.
Yes, as second-hand goods. Article 2 of the Value Added Tax (Special Provisions) Order 1995 defines second-hand goods as tangible movable property suitable for further use as it is or after repair; among vehicles it takes out only motor cars, which have three or more wheels. A used bicycle fits it. Belgium’s FPS Finance uses the same definition, and its list of second-hand means of transport names only motorised land vehicles, boats and aircraft.
Yes. The definition of second-hand goods itself speaks of goods usable again as they are or after repair. New tyres, a new chain or new brake pads do not take the bike out of the scheme.
In the UK it can stay in: gov.uk’s global accounting guidance allows you to combine two or more items to produce one item for resale. In Belgium it falls outside: FPS Finance excludes goods processed so heavily that at the point of sale you cannot establish they are the same goods as at purchase.
In the UK, at 20%, the VAT is one-sixth of the margin: €150 ÷ 6 = €25.00 (in pounds the sum works the same way). In Belgium, at 21%, €26.03 (€150 × 21/121). In the Netherlands you land on the same amount; in France on €25.00.
The same question, a different kind of piece. The answer differs more often than you would expect.
Every piece gets its own purchase price, selling price and scheme. Vintro Pro keeps margin goods separate from the rest and works out your margin per return period.
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