VAT for supply of services

Hello, I am launching an online resale marketplace where users can buy and sell second-hand/pre-owned goods through an app. Our platform facilitates transactions with a service fee, which is subject to a 20% VAT rate. We do not sell any second hand goods, this is solely done by users of our platform. I need clarification on whether VAT needs to be applied to the resale price of items set by sellers of the pre-owned goods. Specifically, are sellers required to pay and collect VAT on items they purchased in the past, which already included VAT? Additionally, does VAT apply to the sale of personal items? In conclusion, will our company only be required to apply VAT on the commision (service fee) for the service we provide? Thank you.

 

Hi. If you are the platform bringing together a buyer and a seller of second hand goods and you do not own the goods at any point then you will be charging a commision  to the customer and this would be a charge which attracts VAT. If members of the public are selling their belongings then these would not constitute taxable supplies as they are not a business. However if a business is selling second hand goods then this will attract VAT and if the business is VAT registered they can use the second hand margin scheme for the sale of these items. Please see the guidance below: VAT Business/Non-Business Manual VAT margin schemes  . Thank you .