Does VAT apply to products sold on Back Market Pro?Updated a month ago
Not always!
Generally, products sold on Back Market Pro are subject to VAT. If VAT applies, the VAT amount will be displayed during your purchasing journey. This VAT may be reclaimed under standard conditions if you are VAT-registered - please consult your accountant.
In some cases, VAT may not apply: in these cases, the VAT amount will not be displayed during the purchasing journey and you will pay a VAT-exclusive price. This is notably the case for certain refurbished products sold on Back Market Pro that are subject to the VAT Margin Scheme, for which no deductible VAT appears on the invoice.
Case 1: Products subject to the standard VAT scheme
All merchants selling on our platform ship from within the United Kingdom.
If you hold a valid UK VAT number, VAT applies as follows:
Country of dispatch | Country of delivery | Buyer status | VAT applicable |
|---|---|---|---|
UK | UK | VAT-registered | Yes. Domestic delivery: VAT is charged at 20% and is deductible under standard conditions. |
UK | UK | Non-VAT-registered | Yes. VAT is charged at 20% and is not deductible. |
Case 2: Products subject to the VAT Margin Scheme
There is a special regime applicable to certain second-hand goods called the VAT Margin Scheme, depending on the seller's situation and the options they have chosen. In this case, the seller does not charge VAT to the buyer and no deductible VAT appears on the invoice.
For businesses that are not VAT-registered or those unable to reclaim VAT, this scheme offers an opportunity to acquire goods at competitive prices without the impact of VAT on the final cost.
For example, for a product sold at £100 excl. VAT:
Buyer status | Standard VAT (UK to UK) | VAT Margin Scheme |
|---|---|---|
VAT-registered | VAT rate = 20% / Price incl. VAT = £120 / Final cost = £100 | VAT rate = N/A / Price = £100 / Final cost = £100 |
Non-VAT-registered | VAT rate = 20% / Price incl. VAT = £120 / Final cost = £120 | VAT rate = N/A / Price = £100 / Final cost = £100 |
How to identify products subject to the VAT Margin Scheme?
Fewer than 10% of products sold on Back Market Pro are subject to the VAT Margin Scheme.
- The "VAT Margin Scheme" labelappears on the product page.
- If the label does not appear, the product is subject to the standard VAT scheme.
- A "VAT Scheme" filter is available on catalogue pages.
On your Back Market Pro invoices, the VAT Margin Scheme will appear as follows:
- A VAT rate of 0%
- A mandatory notice to justify the 0% VAT rate: Margin scheme – Second-hand goods. VAT Margin Scheme under the VAT Act 1994 and HMRC VAT Notice 718.
This FAQ is for informational purposes only and does not constitute legal or tax advice.