One for the Accountants Here! Auctioneer's & VAT!

Blackberry · Jul 15, 2009

I have a potential new client who are going to be setting up as auctioneers.

there is a strong possibility they are going to need to register for VAT, i'm looking for a bit of help in this area regarding the workings of the VAT in such circumstances.

Has anyone got any similar clients or can anyone point me in the direction of help in this area.

The business will be as follows:

the auction of goods for 3rd parties. as auctioneers they will invoice both the buyer and the seller and will collect all monies on the sellers behalf before passing on (minus their commission)

what happens when the seller is VAT regsitered as many dealers will be?

any help much appreciated

Jaydee · Jul 15, 2009

The auctioneer actas as agent and declares output VAT on his fees to the buyer and seller only.

The hammer price (plus VAT if the seller is registered) is irrelevant from the auctioneer's VAT point of view.

The seller will raise a VAT invoice for the hammer price and pass this to the purchaser.

Blackberry · Jul 15, 2009

Thanks Jaydee

Have you any documentation on this? to be honest, i don't think its that straightforward as the auctioneer is the one invoicing the buyer.

I would like to get fully up to speed before the client actaully has to register

RAL · Jul 15, 2009

There are two ways auctioneer can deal with the vat. One is jaydee mentioned as an agent or use auctioneer's scheme. Here is vat notice 718 . Auctioneer's scheme is from Para 7.

Moocher · Jul 15, 2009

Having spent the last 10 years or so buying from auction houses, it is my understanding that if the seller is VAT registered then the auction house is obliged to charge VAT on the hammer price and not just their commission so thats hammer price + commission x 15%).

I know that a couple of years ago the rules changed for auction houses and I havent been to many auctions since. Certainly worth reading the HMRC guidance.

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One for the Accountants Here! Auctioneer's & VAT!

Blackberry

Jaydee

Blackberry

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