What does HMRC ask for in a margin scheme stock book?

For each item: a stock number in sequence, the date you bought it, the seller's invoice number, the purchase price, the seller's name and a description. When it sells: the date of sale, your invoice number, the selling price, the buyer's name, the margin and the VAT due.

How long must I keep my stock book?

HMRC asks you to keep your VAT records, including the stock book, for 6 years.

Free download · UK

Margin scheme stock book template

Q: Can I keep my stock book in a spreadsheet?

Yes. HMRC doesn't require a particular format, as long as the stock book holds the information it asks for and you keep it for 6 years.

Every column HMRC asks for, in one spreadsheet. Type what you paid and what you sold it for, and the margin and the VAT work themselves out.

Excel, Google Sheets or Numbers · free · no sign-up

What the formulas do for each sale

Selling priceincluding any delivery you charged	£900.00
Purchase price	− £450.00
Margin	£450.00
VAT due£450 ÷ 6, rounded to the penny	£75.00

Sold at a loss? The VAT shows £0, because there’s no margin to tax.

A look inside

One row for every item you buy

When you buy itWhen you sell itWorked out for you

No.	Bought	Description	From	Paid	Sold	Invoice	To	Price	Margin	VAT
1	1 Oct	Leica M3 rangefinder	J. Smith	£450.00	8 Oct	INV-0001	A. Morgan	£900.00	£450.00	£75.00
2	3 Oct	Rolex Datejust 1601	Bath Auctions	£2,100.00	in stock
3	5 Oct	Hasselblad 500C/M	Camera fair	£320.00	9 Oct	INV-0002	S. Patel	£300.00	−£20.00	£0.00

The columns

What each column is for

HMRC asks margin scheme sellers to record these for every item. The template has a column for each one.

Stock no.Number every item in order: 1, 2, 3… Put the same number on the item’s invoice when it sells.
Date boughtThe day you bought it.
DescriptionEnough to tell items apart, like the make, model and year.
Bought fromThe name of the person or business who sold it to you.
Seller’s invoice or receipt no.The number on their receipt, if they gave you one.
Purchase priceWhat you paid, including anything the seller charged on top, like an auction buyer’s premium. Not repairs.
Date soldThe day you sold it. Leave it blank while the item is in stock.
Your invoice no.The number of the margin scheme invoice you gave the buyer. Our free invoice template makes one.
Sold toYour buyer’s name.
Selling priceWhat the buyer paid, including any delivery you charged them.
MarginWorked out for you: the selling price minus what you paid.
VAT dueWorked out for you: the margin ÷ 6, or £0 if you sold at a loss.

Questions

Stock books, simply

Do I have to keep a stock book?

Yes, if you use the margin scheme. It’s how HMRC can see that the VAT you paid on each item matches its margin. Keep it, with the purchase and sales invoices, for 6 years.

Can it be a spreadsheet?

Yes. HMRC doesn’t ask for a particular format, as long as the stock book holds the information above. Keep a backup copy somewhere safe.

Why divide by 6?

VAT is 20%. For every £100 you keep, the customer pays £20 of VAT on top, so £120 in all. That £20 is one-sixth of £120, so the VAT already inside your margin is the margin ÷ 6. Try it with the calculator.

What if an item is lost, broken or returned?

Write what happened in the Notes column and leave the sale columns blank. If a buyer returns an item and you refund them, the VAT you worked out on that sale comes off in the VAT period of the refund.

I use global accounting. Does this work?

Global accounting works on totals for each VAT period rather than item by item, so the per-item VAT column doesn’t apply. You still need to record your purchases and sales. Ask your accountant how they’d like the totals set out.

Selling on Shopify? MarginVAT keeps this for you.

Add an item when you buy it. When it sells, MarginVAT fills in the sale, works out the VAT, sends the invoice and adds it all up for your VAT return.