First experience bidding via auction house

hermum

When customers return to the original supplier they would receive a full refund including the Vat paid, so I suppose the vat still needs to be charged.

RFW

JC_Derby wrote: »

interesting john pyes, charge VAT on all the stuff they sell and the majority of that is customer returns....doesnt that class as second user then?

A lot of this are grey areas, when we ran an auction house we actually got corrected by the Vat office for doing something they had told us to, so a lot of the time they don't know.
Returns have always had VAT on them though if the seller is registered, my guess is that the VAT treats them as something else as they aren't technically second hand, as the buyer has been refunded, (you return, you get a refund) so no VAT has been paid.

The reason that second hand goods don't carry VAT is that duty has already been paid, there are even exceptions to this.

martindow

I always assumed that if the lots were in the auction from a VAT registered business VAT is added to the hammer price. If items were entered from a private individual VAt would not be added. The buyers' and sellers' premiums would have VAT added as the auction house itself would be registered.

RFW

martindow wrote: »

I always assumed that if the lots were in the auction from a VAT registered business VAT is added to the hammer price. If items were entered from a private individual VAt would not be added. The buyers' and sellers' premiums would have VAT added as the auction house itself would be registered.

This is one of the problems we had, we were largely business to business so were advised to sell everything as VATable as we were registered, irrespective of the VAT status of the vendor. This still varies and I'd say the majority only charge VAT when the vendor is registered and the item is subject to VAT. I actually spent a fair amount of time recently claiming VAT back from an auction house when the goods were zero rated, but that's another story. Surprising how few people actually know what is or is not subject to VAT.