Is there VAT on refurbished phones? (UK shops)

Is there VAT on refurbished phones? Yes, if your shop is VAT registered. Whether it is charged on the whole price or only on your margin depends on how you bought the phone, not on whether you refurbished it (official guidance). The rules behind that are the VAT margin scheme, and this post applies them to the phones a shop buys, fixes and sells.

Do you pay VAT on second-hand phones?

There are two cases.

• Bought from a member of the public, with no VAT shown. The phone can go through the margin scheme, which taxes the difference between what you paid and what you sold it for, at one sixth of that difference (official guidance).
• Bought on an invoice that showed VAT. The margin scheme cannot be used for "any item you bought for which you were charged VAT" (official guidance). You sell it with VAT on the full price, in the normal way.

Does refurbishing change the VAT?

Not the VAT on the phone. Repairs, parts and accessories cannot be included in margin calculations, and the VAT you were charged on them is reclaimed on your VAT return in the normal way instead (official guidance). A new screen changes what you keep, not the margin the VAT is worked out on.

A phone that needs work still counts: GOV.UK defines second-hand goods as "goods that can still be used, or which could be used after repair" (official guidance).

Refurbished phones bought from a trade supplier

If a supplier sold you a refurbished phone on an invoice that showed VAT, the margin scheme does not apply to that phone (official guidance). If it came from another VAT-registered business under the margin scheme, the purchase invoice carries its stockbook number and the words "margin scheme - second hand goods" (official guidance). What each invoice must say is in what a margin scheme VAT invoice must show.

Tablets, laptops and consoles

The same rules apply to any second-hand goods the scheme covers (official guidance), so a used tablet, laptop, games console or smartwatch is treated the way a used phone is. The wider picture for every kind of stock is in VAT on second hand goods.

What it looks like on one phone

Bought for £180, a £40 screen fitted, sold for £240: the margin is £60, the VAT is £10.00, and you keep £10.00 after the screen. Example 2 in how to calculate margin scheme VAT works it through, and the margin calculator takes your own figures. Whether a given phone qualifies at all is the checklist in when does the margin scheme apply.

Where SlickCell fits

Second-hand stock can be taxed on the margin between what you paid for that unit and what you sold it for, reported separately from standard-rated sales. Because every device carries its own purchase cost, the per-item record the margin scheme asks for is already there. See how used-device stock is costed per unit.

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General information, not tax advice. Check the published guidance or speak to your accountant. Rules on this page were checked against the published guidance on 25 September 2026.