Do you pay VAT on auction fees?
Usually yes on the buyer's premium, and sometimes on the winning bid too. It depends on how the lot is being sold, and it's one of the most common reasons a final bill comes as a surprise.
Three places VAT can appear
- On the buyer's premium. Most auction houses charge VAT on the premium, either added on top or already included in the quoted rate.
- On the hammer price. Only for some lots, typically those sold under standard VAT rules, for example by a VAT-registered business seller. Many lots carry no VAT on the winning bid at all, such as items sold by private individuals or under a margin scheme. Auction houses usually mark lots with a symbol in the catalogue. The symbols differ between auction houses, so check the key in the conditions of sale.
- On other charges, such as an online bidding fee or shipping, which usually have VAT added in the same way as the premium.
"Plus VAT" or "inclusive of VAT"?
This wording matters more than anything else on this page.
- "Premium plus VAT" means VAT is added on top of the premium. In BidCalc, leave the VAT box at 20%.
- "Premium inclusive of VAT", or an invoice that says the premium includes VAT, means the VAT is already inside the percentage. Add it again and you'll count it twice. In BidCalc, set the VAT box to 0%.
The margin scheme in plain English
Many antiques, art and collectors' items are sold under a VAT margin scheme. HMRC's auctioneers' scheme lets the auction house account for VAT on its own margin rather than on the full price. For you as the buyer, that normally means no VAT shown on the hammer price, and a buyer's premium that already includes VAT. HMRC's own manual describes the premium as VAT-inclusive under this scheme (VATMARG04150).
Can you reclaim it?
If you're buying as an individual, no. The VAT is simply part of what you pay.
If you're a VAT-registered business, it depends on how the lot was sold. VAT charged under standard rules may be reclaimable as input tax, but VAT that's built into the premium of margin-scheme goods generally isn't. HMRC's guidance also says an auctioneer may re-invoice a lot under normal VAT rules if the buyer asks, which lets the buyer reclaim VAT, though that lot can then no longer be resold under a margin scheme (VATMARG04200).
Two worked examples
Both use a hammer price of £1,000 and a 20% buyer's premium plus VAT, with no other fees.
Example A: VAT on the premium only
| Hammer price | £1,000.00 |
| Buyer's premium (20%) | £200.00 |
| VAT at 20% on the premium | £40.00 |
| Total to pay | £1,240.00 |
Example B: the lot is sold under standard VAT rules, so VAT is also charged on the hammer price
| Hammer price | £1,000.00 |
| VAT at 20% on the hammer price | £200.00 |
| Buyer's premium (20%) | £200.00 |
| VAT at 20% on the premium | £40.00 |
| Total to pay | £1,440.00 |
The same hammer price costs £200 more, so check which applies before you bid.
How to check before you bid
- Read the VAT section of the conditions of sale
- Look for a symbol or note on the lot itself, and find its meaning in the catalogue key
- If it's still unclear, ask the auction house. They answer this question all the time.
How BidCalc helps
The VAT box sets the rate applied to the fees. Tick "Also apply VAT to this" under the bid amount for lots where VAT is charged on the hammer price too, and set the VAT box to 0% if your premium already includes VAT. The breakdown shows every VAT line separately, so you can see exactly where the money goes.
Try Example A in the calculator Open the calculator (for Example B)General information only, not tax or financial advice. Auction houses set their own fees and terms, so always check the conditions of sale and confirm the details with the auction house before you bid. VAT rules are complicated and depend on your own circumstances.