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HMRC internal manual

Debt Management and Banking Manual

Enforcement action: distraint: costs and accounting: auctioneer’s costs where goods have been sold

Where the goods have been sold

If the goods are sold, the auctioneer will deduct and retain the costs of removal, appraisal and sale from the realisation and pay you the net amount. The auctioneer will:

  • deduct VAT on the fees and charges if he is a `taxable person’
  • deduct VAT on the sale proceeds if the defaulter is a `taxable person’
  • deduct the cost of any electrical safety check(s)
  • send you a reconciliation statement showing how the amount paid is made up.

The auctioneer will account for any VAT deducted. These costs will not normally be accounted for by HMRC.

Where the bailiff or auctioneer:

  • claims that the set scale of fees and so on is inadequate for their work
  • deducts from the proceeds of sale a sum in excess of the scale charges

make sure that any excess charge is reasonable before paying their claim.