VAT? on second hand machinery

[wallace]

Hi all, I have just bought a machine via an online auction, not ebay but one of them where items come from companys that have gone under. When I got the invoice I have been charged vat on the hammer price and then a buyers premium and then vat on the premium. The machine must be 40 years old. Is this correct?
Mark.

p.s I should really have read the tiny print

 

[Chrispy]

yes

 

[Phil Pascoe]

Yes, you should have read the small print.

 

[Phil Pascoe]

I only did that once - just like you'll only do it once.

 

[CHJ]

I have never understood the second user/buyer Vat charging scenario.

I understand that vat is due on the services of a vat registered seller.

I understand that anything that was originally subject to vat is liable for vat when re-traded.

But I always thought that vat was only due on the profit/markup value between what the trader bought it in for and what he sells it out for, I.E. if he does not make a profit/sells it for the bought in cost, no vat is due to the exchequer.

However the vat always seems to be applied to the full selling price and there is no way a buyer can challenge the markup of the used goods trader.

Where in the company accounting system is this balanced and what happens to the vat charged over and above the 'profit value' of the second hand sale.

I can see that Vat due to the exchequer is based on bottom line figures of outlay against income, but it seems to me buyers paying vat on full selling price are paying more than their fair share of this figure.

 

[Hudson Carpentry]

I often buy machines and stock via auctions from liquidators thats selling off a failed companies assets. The auction company will be VAT registered and therefore will have to charge VAT like any VAT registered company. When bidding either online, in house or on location you need to keep in mind that the true price your bidding includes VAT and a buyers premium. Its wise to work out before you bid the max you want to pay intotal, then work out what that is without the taxes and so you can bid that amount at the hammer.

Your not paying VAT on the secondhand machine your paying VAT on the service the auctioneer has just provided you in selling you something.

Was it eddissons by any chance?

 

[wallace]

Thanks for the explanation chaps. It did give me a shock when I recieved the invoice. But it still worked out cheaper than getting it on ebay where the prices seem to really silly at the moment. The auctioneer was sanderson weatherall.
Mark

 

[Phil Pascoe]

I've been to auctions where one lot has carried vat and the next near identical lot hasn't, according to whether the firm it came from was registered or not, so the above information seems wrong to me. They both have lot money applied, and vat on that obviously.The catalogue has been split into sections, some carrying vat, some not.

 

[foxhunter]

Yes VAT is always charged on the auctioneer's commission and under certain circumstances it can also be charged on the hammer price. These items should always be identified in the catalogue either by individual items or as mentioned above in the Ts & Cs.
Even on Ebay some sellers charge VAT on the final price.

 

[Benchwayze]

+1 for Yes. Which is why I try to buy private for used goods.

 

[Eric The Viking]

The VAT thing at auction depends on the VAT status of the owner, and the auction house charges their "buyer's premium" separately.

The buyer's premium is the real rip-off in all this. The auctioneer is legally the agent of the vendor. I fail completely to understand what service they provide to the buyer, or what the buyer gets in exchange for the money.

Fine arts auctioneers started the practice and everyone else jumped on the bandwagon. It's time it stopped.

E/