HMRC Margin Scheme for Watch Dealers: Complete Guide for 2026

Everything UK luxury watch dealers need to know about the VAT Margin Scheme for second-hand goods, with worked examples for Rolex, Patek Philippe and Audemars Piguet sales.

HMRC Margin Scheme for Watch Dealers: Complete Guide for 2026 If you sell pre owned luxury watches in the UK, the VAT Margin Scheme for second hand goods is almost certainly the right way to charge VAT. It can dramatically reduce your VAT bill compared to standard 20% VAT and protects your margins. What is the Margin Scheme? Under the standard VAT scheme you charge 20% on the full sale price. Under the Margin Scheme you only charge VAT on the profit margin — the difference between your buying price and your selling price. Worked example: Rolex Submariner 124060 You buy from a private seller: £8,500 You sell to a customer: £10,200 Margin: £1,700 VAT 1/6 of margin : £283.33 Net profit before costs: £1,416.67 Under standard VAT you would have paid £1,700 in VAT — almost six times more. Eligib