What are the conditions for using the margin or auctioneers’ scheme option?
The trader or auctioneer must exercise the option at least two years, and must notify the National Advice Servicein writing, specifying the date when the option is to apply. After this period, the trader or auctioneer must notify the National Advice Service if and when they wish to cease using the scheme. The option to use a scheme must be taken up in respect of all transactions and goods listed above, not just in respect of certain categories of transactions or certain categories of goods. If, having exercised the option, a trader or auctioneer sells any goods covered by the option outside a scheme, he cannot recover any input tax on those goods until the period in which the sale is accounted for, in accordance with regulation 29 (1) of the VAT Regulations 1995. If the option to use the margin scheme or auctioneers’ scheme is not taken up, VAT must be accounted for in the normal way. Notice 718 explains both options in more detail and also provides examples of how the schemes will app
