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HMRC internal manual

VAT Margin Schemes

The auctioneers’ scheme: Record-keeping and invoicing requirements of the auctioneers’ scheme

What records must auctioneers keep?

The record-keeping requirements are the same as those for the Margin Scheme as detailed in Notice 718 Margin schemes for second-hand goods, works of art, antiques and collectors’ items.

Non-compliance issues are covered in VATMARG10000.

Do auctioneers issue special invoices?

Auctioneers must issue an invoice or statement to the seller and a sales invoice to the buyer showing the hammer price and charges for their services. You should read Notice 718/2, which explains the invoicing requirements in detail.

For the purposes of the auctioneers’ scheme:

  • the auctioneer’s purchase price = the vendor’s selling price; and
  • the auctioneer’s selling price = the buyer’s purchase price.

These respective selling and purchase prices should be clear to the auctioneer’s clients from the details on the invoice.

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Re-invoicing under the auctioneers’ scheme

When goods have been sold under the auctioneers’ scheme, and the buyer subsequently decides that he wishes to treat the transaction outside the scheme, the auctioneer may re-invoice for the transaction under the normal VAT rules.

Provisions for re-invoicing were introduced at the request of the trade, and allow the buyer to reclaim input tax on the hammer price and other charges. Notice 718/2 The VAT Auctioneers’ Scheme details the conditions under which re-invoicing can be done.

Re-invoicing should not affect the vendor’s position, and can be useful when goods are purchased under the scheme and then subsequently exported.

Re-invoicing and the capping rules

Re-invoicing is only permitted within the limits of the capping rules in force. See VR700 for up to date information about capping limits.