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This guidance note provides an overview of a margin scheme that can be used by auctioneers. The auctioneers' scheme is a variation of the main VAT margin scheme used for secondhand goods (see the Margin schemes - overview guidance note for more detail). The margin scheme for auctioneers allows auctioneers to account for VAT based on the hammer price, rather than the sale price. The margin is calculated as follows:

1. •

   adding to the hammer price the cost of the auctioneer's services charged to the buyer

2. •

   deducting from the hammer price the cost of the auctioneer's services charged to the seller

VATA 1994, s 50A; VAT (Special Provisions) Order 1995, SI 1995/1268 (as amended); Value Added Tax (Cars) Order 1992, SI 1992/3122; VATA 1994, s 47(2A); De Voil Indirect Tax Service V3.533; VATMARG04000; VAT Notice 718/2

This method of calculating the margin is generally appealing to auctioneers when compared with