Only for part of it. Global accounting is a form of the VAT margin scheme, and VAT Notice 718 paragraph 2.8 bars every margin scheme for precious metals, investment gold and precious stones. So the gold in a mixed lot is outside global accounting no matter what it cost, and belongs in the gold special accounting scheme. The costume jewellery, base-metal watches and other low-value second-hand goods in the same box can go into global accounting, provided no individual item had a purchase value over £500.
Which means a mixed lot has to be split at intake, not at the VAT return. Once it is in the tumbler, it is too late.
What global accounting actually is
Under the ordinary margin scheme you track each item individually: purchase price, selling price, margin, VAT. That is unworkable for bulk buys of small stuff where you genuinely cannot say what any one brooch cost.
Global accounting replaces item-by-item tracking with a pooled period calculation (Notice 718, paragraph 14.8):
total sales in the period − (total purchases in the period + opening stock on hand) = margin margin × 1/6 = VAT due
If purchases exceed sales, no VAT is due and the negative margin is carried forward to the next period. That carry-forward is the one genuine advantage global accounting has over the standard margin scheme, where a loss on one item cannot be offset against a gain on another.
The £500 rule
Paragraph 14.10: if any individual item has a purchase value over £500, you must not sell it on under global accounting.
Three things follow that dealers routinely misread:
It is the purchase value, not the selling price. An item you paid £300 for and sell for £900 stays in global accounting. The test is applied at the buying end.
It is per item, not per lot. A £4,000 house-clearance box is fine if it is 200 pieces averaging £20. It is not fine if one of those pieces is a £900 watch. That watch comes out and goes into the standard margin scheme with its own stock book entry.
There is a components exception. Paragraph 14.11 allows that where you buy an eligible item for £500 or more which is made up of components each worth under £500, you may sell those components individually under global accounting. This is narrower than it sounds and it is worth reading the paragraph itself before relying on it.
The practical problem is that you often do not know an item's individual purchase value, because you bought the lot for one figure. You have to allocate. Do it at intake, write down how you did it, and pull anything that plausibly exceeds £500 into its own record. An allocation you can explain is defensible; a lot you never opened is not.
How a mixed lot actually splits
Take a typical counter buy or house lot:
| What's in the box | Treatment | Why |
|---|---|---|
| 9ct and 18ct scrap gold, bought by weight | Gold special accounting scheme - reverse charge on sale to a VAT-registered refiner | Priced at metal value; margin schemes barred for precious metals |
| Scrap silver, bought by weight | Not in any margin scheme; normally standard-rated on sale - check with your accountant | Precious metal, but the gold scheme does not cover silver |
| Loose stones knocked out of settings | Outside all margin schemes | Precious stones are excluded by paragraph 2.8 |
| A gold ring you will re-sell as a ring, cost allocated at £180 | Global accounting, if you can stand behind the £180 | Sold as jewellery, not at metal value, and under £500 |
| A Seiko you will refurbish and sell, cost allocated at £60 | Global accounting | Second-hand good, under £500 |
| An Omega you will list at £2,400, cost allocated at £700 | Standard margin scheme, own stock book entry | Over the £500 cap |
| Costume jewellery, buttons, base-metal chain | Global accounting | Low-value second-hand goods |
That is four different VAT treatments out of one purchase. It is the single strongest argument for classifying at the bench rather than at month-end.
Note the fourth row carefully. A gold ring re-sold as a ring is not the same transaction as gold sold at metal value, even though it is the same metal. The margin scheme bar on "precious metals" applies to metal traded as metal. Where a piece is bought and sold as jewellery, at jewellery money, it is a second-hand good. Where the price is set by the gram, it is not. If a piece could plausibly go either way, the price you paid tells you which - and the note you make at intake is your evidence.
What the global accounting records must show
Notice 718 paragraph 15.3 (purchases) and 15.5 (sales) require:
- Your name and address
- The other party's name and address
- Invoice number and date of the transaction
- A description of the goods, sufficient to verify that they are eligible for the scheme
- The total price, with no VAT shown separately
- The statement "global accounting invoice"
That description requirement is the one to take seriously. "Job lot, assorted" does not let anyone verify eligibility. "Approx. 140 items costume jewellery and base-metal watches, no item over £500, gold and stones removed and recorded separately" does.
Goods you cannot put in global accounting at all
Paragraph 14.5 excludes:
- Aircraft
- Boats and outboard motors
- Caravans and motor caravans
- Horses and ponies
- Motor vehicles, including motorcycles, except those broken up for scrap
Plus, from paragraph 2.8 and applying to all margin schemes: precious metals, investment gold and precious stones.
Stopping the scheme
If you stop using global accounting, paragraph 15.7 requires a closing adjustment: the purchase value of your closing stock is added to your sales figure for that final period, to reverse the relief you have already taken on goods you have not yet sold. The adjustment does not apply where the VAT due on closing stock is £1,000 or less.
Worth knowing before you decide the scheme is more trouble than it is worth and simply stop.
The honest summary
Global accounting is the right answer for genuine bulk, low-value, second-hand goods. It is the wrong answer for the reason most dealers reach for it - which is that a mixed lot is a nuisance to itemise. The nuisance is the compliance. Sorting the box is not overhead you can avoid by choosing a different scheme; it is the work the scheme assumes you have already done.
Sources
- The Margin and Global Accounting Scheme (VAT Notice 718) - GOV.UK, sections 2.8, 14 and 15
- Gold acquisitions, imports, investments and VAT (VAT Notice 701/21) - GOV.UK, section 11
Note: older references point to "VAT Notice 718/1" for global accounting. That notice covered second-hand cars and has been withdrawn. Global accounting now sits inside Notice 718 itself.
This is general information, not tax advice. Allocating cost across a mixed lot involves judgement, and HMRC may take a different view of your allocation than you do. Agree your method with your accountant before you apply it to a year's worth of buying.
WatchCRM makes you classify each line as you weigh a lot in, and refuses to file anything over £500 into the global accounting pool. The gold comes out on the reverse charge side automatically, with weight and fineness attached.