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HMRC internal manual

VAT Export and Removal of Goods from the UK

HM Revenue & Customs
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Particular types of export to destinations outside the EC: Exports through auctioneers


The VAT treatment of goods sold for export at auction depends on whether the auctioneer is acting as agent or principal.

Auctioneer acting as agent

Where an auctioneer, who is not acting in his own name, sells goods as agent on behalf of a VAT registered trader to an overseas person who intends to export the goods, the trader may zero-rate the supply under the provisions of regulation 129 of the VAT Regulations 1995, subject to meeting the conditions set out in Notice 703.

Auctioneer acting as principal

Where auctioneers act in their own name they are treated as principals. In these cases, for VAT purposes, there is a supply to the auctioneer and from the auctioneer. Where the goods are exported, only the supply from the auctioneer to the overseas customer can be zero-rated. Traders registered for VAT and selling goods at auction in these circumstances must not zero-rate the supply. Further information about the role of auctioneers is set out in VAT Notices and guidance:

  • Notice 700 The VAT Guide
  • Notice 718 Margin Schemes for second-hand goods, works of art, antiques and collectors’ items
  • V1-23 Schemes (Chapter 7 Margin Schemes)
  • V1-37 Control Notes
  • V1-5 Taxable person (Chapter 3).

For further details contact Accounting, Registration and Exports Team - see VEXP10800. Further contact details are available on the intranet webpage (Product and Process Groups>Corporation Tax and VAT>BusinessSubject Directory).

Tribunal appeal – Bashir Mohammed (LON/99/188)

The case of Bashir Mohamed examined the liability of goods supplied to an overseas customer where an auctioneer acted as principal in the supply of those goods.

A company which dealt in antiques arranged for an antique locket to be sold at auction. It was purchased by a Kuwaiti who exported it. The company did not account for output tax on the sale of the locket. The Commissioners issued an assessment and imposed a misdeclaration penalty. The company appealed, contending that the sale should be treated as a zero-rated export. The tribunal rejected this contention and dismissed the appeal,holding that the locket was sold through the auctioneers who were agents acting in their own name. Accordingly, by virtue of section 47(2A) of VAT Act 1994, there was a supply of goods by the company to the auctioneers and a supply by the auctioneers to the Kuwaiti purchaser. Although the sale was an export which qualified for zero-rating, the supply by the company to the auctioneers was standard-rated.

Tribunal appeal – J.V. Cambridge (LON/90/151)

The case of J V Cambridge examined the liability of goods supplied to an overseas customer where an auctioneer acted as agent but did not obtain the necessary evidence of export.

The appellant sold goods between July 1986 and March 1989 which he zero-rated as exports. He said that he was unable to provide the documentation laid down in Notice 703 because the auction houses had not informed him of the identity of the purchasers. He produced letters from the auction houses which stated whether individual lot numbers had been purchased by overseas or UK buyers. The appellant had been informed by the auction houses that letters of this type were accepted by the Commissioners as evidence of export.

The Commissioners accepted that the appellant genuinely believed that the goods had been exported but in the absence of documentary evidence, the supplies were taxable. TheTribunal ruled that as the appellant had not complied with the conditions for zero-rating his appeal must fail, notwithstanding that the failure to comply was in no sense his own fault.