VAT Auctioneers’ Scheme
As part of the reorganisation of the VAT margin scheme publications HMRC have launched a new notice (718/2) entitled ‘VAT Auctioneers’ Scheme’. This notice includes information relevant to the supply of antiques and similar items made at auction. The guidance contained within this notice had previously been included in the general VAT Margin Scheme notice.
The margin scheme works by allowing auctioneers to account for VAT on their profit margin i.e. on the difference between the cost of acquiring an item for auction and its sale price at auction.
The notice explains:
- Which goods can be sold under the scheme;
- How the scheme works;
- How to calculate the margin;
- What records must be kept.
The notice also covers changes to the rules concerning the information that must be included on auctioneers’ scheme invoices. Certain parts of the notice have ‘force of law’; these sections are clearly marked.