The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
This guidance note provides an overview of the margin scheme that can be used by auctioneers. The auctioneers' scheme is a variation of the margin scheme. It allows auctioneers to account for VAT on a margin, the calculation of which involves:
adding to the hammer price the cost of the auctioneer's services charged to the buyer
deducting from the hammer price the cost of the auctioneer's services charged to the seller
VATA 1994, s 50A; VAT (Special Provisions) Order 1995, SI 1995/1268 (as amended); Value Added Tax (Cars) Order 1992, SI 1992/3122; VATA 1994, s 47(2A); De Voil Indirect Tax Service V3.533; VATMARG04000; VAT Notice 718/2
This note should be read in conjunction with the following guidance notes:
Overview of margin schemes
Operating the margin scheme
Global Accounting margin scheme
Margin scheme ― agents and pawnbrokers
If an auctioneer:
invoices in its own name
sells goods that are eligible to be sold under the margin scheme (please note that businesses can only use the scheme to account for sales of air guns if they are registered under the Firearms Act 1968)
The auctioneer has a number of methods that it can use in order to account for VAT due on the sale of these items. These are:
using the auctioneers’ scheme
using the normal margin scheme ― see the Overview of margin schemes guidance note
acting as an undisclosed agent ― see the Margin scheme ― agents and pawnbrokers guidance note
The auctioneers’ margin scheme that has been adapted to deal with the types of sales made by auctioneers. Under the scheme, the VAT due is calculated on a margin which is equal to the value of the services supplied to the buyer and seller using the auction. Therefore, VAT does not need to be accounted on the hammer price of the goods sold.
The following conditions need to be satisfied in order to use the scheme:
the goods must be eligible to be sold
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