VAT on second hand goods: what a shop owes

VAT on second hand goods is due when a VAT-registered shop sells them. The question is not whether, but on how much: the whole selling price, or only the difference between what you paid and what you sold for. That second option is the VAT margin scheme, and whether a used phone, tablet, laptop or console can go through it depends on how you bought it.

Is there VAT on second-hand goods?

Yes, if you are VAT registered. By default VAT is charged on the full selling price at the standard rate, which is 20% (official guidance).

The alternative is a margin scheme. It taxes "the difference between what you paid for an item and what you sold it for, rather than the full selling price", at 16.67%, one sixth of that difference (official guidance). Second-hand goods are one of the things it covers, and GOV.UK defines them as "goods that can still be used, or which could be used after repair" (official guidance).

When only the margin is taxed

Two conditions decide it for a shop selling used devices: you were not charged VAT when you bought the item, and you keep the records the scheme requires. If you do not meet all of its requirements, VAT is due on the full selling price of each item (official guidance). The whole checklist is in when does the margin scheme apply.

Second-hand items bought from a VAT-registered supplier

A margin scheme cannot be used for "any item you bought for which you were charged VAT" (official guidance). So a used laptop bought from the public can go through the scheme, and the same laptop bought on a supplier invoice that showed VAT cannot: that one is sold with VAT on the full price, in the normal way.

Where some of your stock is eligible and some is not, you charge VAT on the ineligible items in the normal way (official guidance).

A worked example

Buy a used phone from a member of the public for £180 and sell it for £240.

• Under the margin scheme: the margin is £60, and the VAT is £60 ÷ 6 = £10.00.
• On the full price: the VAT inside £240 is £240 ÷ 6 = £40.00.

Same phone, same sale, £30 apart. Put your own figures through the margin calculator, or see four cases worked in full in how to calculate margin scheme VAT.

What records decide it

The scheme asks for a stockbook that tracks each item sold under it individually, and copies of the purchase and sales invoices for all of them (official guidance). "Each item" is the point: the VAT on a sale depends on what that one device cost, so a shop has to know the cost of every unit, not of a model.

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.