VAT on 2nd hand goods

alessandra

On Tues 15/11/05 I attended an online auction on https://www.bidspotter.com for sale of second hand audio equipment from Whitfield Studio, London. Sadly it seems that the studio closed down for money problems and all items have been auctioned, I guess by the receivers. Upon registering on line I checked all small prints best I could and I found no mention of VAT charges, although commission charges of 13% were clearly stated.
I won a bid for the value of £200, and today I receive an email from the auctioneers were I am charged a total of £265.55 including VAT.
I would appreciate your advice on this matter as firstly no mention of VAT was ever made on the website, second I did not think that second hand goods sold attract VAT.

Thanks & Regards
Alessandra

dunstonh

http://archive.treasury.gov.uk/pub/html/budget97/ce6.html

So, according to that they can only charge VAT on the profit, not the full amount.

alessandra

All I know is that I thought I would pay £200 for my item plus £26 as 13% commission charge, instead they wacked vat on top of £226. Is it legal?
Aless

alessandra

Dunstonh thanks for the link, sorry I am a new user of forums and did not see the link until after I sent my other message. I'll try and fight my point with that document.

Cheers!
Alessandra

rrwfotr

Hi could you let us know how you get on, seems strange charging VAT twice... I wonder if the actaully pay it to HMIR.

Lazy_Ike

alessandra wrote:

All I know is that I thought I would pay £200 for my item plus £26 as 13% commission charge, instead they wacked vat on top of £226. Is it legal?
Aless

VAT registered Auction houses are required to add VAT to the commission, and they usually state this in their T&C's so a charge of £230.55 would have to been appropriate here. However they have clearly added VAT to the whole amount. At some Auctions I have attended the Auctioneer has announced that certain lots attract VAT on the Hammer price, but these are usually new items, and even then are the exception rather than the norm.

geo555

Bidspotter provides an online auction service to various auctioneers. The goods being sold would either be owned by the auctioneer or sold on behalf of a company or the recievers of a company. As they are likely to be VAT registered, VAT would be charged on the sale amount and the commission/ buyers premium.
Unfortunatly the sale was meant for business customers, who would expect to pay VAT, it comes as a bit of a shock to a private customer that VAT and commissions bump up what you think is a bargain.

alessandra

geo555, You couldn't have put it clearer! This is exactly what the auction house told me when I contacted them this morning.
Luckily this amount is still below current market price, therefore we are happy!!
Good lesson learned though!!!

Thanks to everybody who posted to help me
Cheers
Alessandra