Margin scheme ― auctioneers

By Tolley

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Margin scheme ― auctioneers
  • Accounting for VAT
  • Conditions
  • Auctioneers' scheme calculations
  • International transactions
  • Books and records
  • VAT registered dealers buying and selling at auction
  • Selling new goods for private sellers
  • Imported works of art, antiques and collectors' pieces and works of art obtained from the creators or their heirs
  • Other transactions

VATA 1994, s 50A; VAT (Special Provisions) Order, 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 (subscription sensitive); VATMARG04000; VAT Notice 718/2 

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

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
Accounting for VAT

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

More on Margin schemes: