Vintro Pro
NL · FR · EN
Vintro Pro
NL · FR · EN
Two things decide the answer here, and neither is written on the handset: who you bought from, and how far you go with the refurbishment.
Second-hand smartphones fall under the margin, if you bought them without VAT.
Second-hand smartphones fall under the margin scheme. A fleet purchase with VAT on the invoice does not, and in Belgium and France a heavy rebuild touches the renovated-goods line.
A used handset that still works is tangible movable property that can be used again. That clears the UK test in article 2 of the Value Added Tax (Special Provisions) Order 1995.
In this trade the stock comes from two very different channels: private individuals and corporate fleets. The first yields margin goods, the second often does not.
Buy from a private individual and there is no VAT, so nothing to deduct. That is exactly the situation the margin scheme exists for.
Buy a fleet from a company with VAT on the invoice and it is an ordinary purchase: article 12(3) of the 1995 Order requires a purchase on which no VAT was chargeable, and gov.uk excludes any item you bought for which you were charged VAT. You sell those handsets with ordinary VAT on the full price.
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 second-hand smartphone: bought for €150.00, sold for €320.00. 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 170 is 34.00, while in the UK you owe one-sixth, 28.33 — the 16.67% gov.uk quotes. At Belgium’s 21%, the same mistake turns €29.50 into €35.70. 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?
Replacing a screen or a battery is repair work, and that word sits in the definition of second-hand goods itself. The UK sets no renovation test: the parts stay out of the margin (gov.uk). In Belgium a handset rebuilt largely from new parts sits against the renovated-goods exclusion, and France treats it as a new product.
Handsets broken up for parts can stay in the UK scheme: HMRC lets you sell the parts under global accounting if each was worth less than £500 (VATMARG03300). Wiping data is a separate obligation that has nothing to do with VAT.
Selling a batch to another trader? In the UK the domestic reverse charge applies to mobile phones sold between businesses from £5,000 per invoice, but not to second-hand phones you sell under the margin scheme (HMRC, VAT Notice 735). In the Netherlands, supplies of mobile phones to other businesses of €10,000 or more (excluding VAT) per type of goods per supply are reverse-charged (Belastingdienst); that page does not say whether margin sales are covered.
In the UK, whether smartphones 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 smartphones, 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.
If your supplier charged you VAT, the handsets are not margin goods, whether or not you deducted it. That choice is made at purchase.
In the UK each margin item goes individually into the stockbook (gov.uk, VAT margin schemes); fleet handsets bought with VAT stay out of it. With two buying channels that is no formality.
The margin is selling price minus purchase price. A new battery lowers your profit, not your margin.
In the UK the cost never enters the margin; in Belgium and France, the more new parts, the closer you get to the renovated-goods line.
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, if you bought them from someone who could not charge VAT (not: a reverse-charge purchase or an import). A working second-hand handset is tangible movable property suitable for further use, which is the definition of second-hand goods in article 2 of the Value Added Tax (Special Provisions) Order 1995, and article 12(2) opens the margin scheme to it. Belgium uses the same definition.
If there is VAT on the invoice, it is an ordinary purchase with deduction and not margin goods: gov.uk excludes any item you bought for which you were charged VAT. You then sell those handsets with ordinary VAT on the full selling price.
In the UK, yes, if you bought it without VAT: the 1995 Order sets no renovation test, and the refurbishing costs stay out of the margin. In Belgium and France it depends on how far you go, not on the word on the box: a handset largely rebuilt from new parts sits close to the renovated-goods line.
In the UK, at 20%, the VAT is one-sixth of the margin: €170 ÷ 6 = €28.33 (in pounds the sum works the same way). In Belgium, at 21%, €29.50 (€170 × 21/121).
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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