The arrangements for auctioneers depend upon whether they are acting as an agent of the farmer or as a principal.
1. Auctioneer acting as agentIf the auctioneer is acting as agent, the agricultural produce remains the property of the flat rate farmer until it is sold. The farmer cannot charge the flat rate addition (FRA) to the auctioneer because the auctioneer does not take title to the goods. The farmer can however charge the FRA to the eventual buyer of the goods, provided they are registered for VAT.
2. Auctioneer acting as principalIf the auctioneer is acting as principal - buying and selling the goods - and is registered for VAT, the farmer may charge the FRA when the auctioneer takes title to the goods. The auctioneer will be able to reclaim the amount charged as though it were input tax. When the auctioneer sells the goods, VAT must be charged on the sale, according to the normal rules.