Tax & VAT for Wholesale

Some of our imported stock – mainly Pokémon booster boxes from Asia and certain second-hand goods from the USA fall under what’s called the Global Margin Scheme for VAT purposes.

In simple terms, these boxes are treated as second-hand goods because they were originally sold abroad with local taxes already paid, and are marked “for resale in their original country and not for export.”

The idea behind the scheme is to avoid double taxation. Instead of paying full VAT abroad, then again here in the UK when we resell, we only pay VAT on the profit margin we make.

That means:

We pay a small amount of VAT (roughly one-sixth of our profit).
To cover that, we include a 5% adjustment in the sale price compared with companies who prefer to pay VAT in the usual way.
When you buy a Global Margin item, no VAT is added to the full sale price, and you won’t see VAT listed separately on your invoice as it’s already accounted for behind the scenes.

In plain English:

“Japanese seller pays tax. Sends item to us. We account for import VAT through the PVA scheme (so there’s no extra VAT cost). Because these items are classed as second-hand for VAT purposes, we only pay VAT on our profit, not on the full sale price. That’s why our prices are usually lower than VAT-registered sellers who have to charge the full 20%.”

If your accountant is struggling with understanding this, and you would like to consider a new firm, our accounting firm are happy to have an onboarding meeting. If so please email wholesalesupport@invictatcg.co.uk for an introduction.