VAT & Tax Guide


VAT

Depending on the status of the lot, and your status as a buyer, VAT may be charged on the hammer price, the buyer's premium or both.

UK Auctioneer's Margin Scheme

Most items we sell are second-hand goods, so we sell them under UK Auctioneer's Margin Scheme rules. Lots falling into this category have no VAT symbol and are treated as follows:

No symbol

UK Auctioneer's Margin Scheme sale

20% VAT charged on the buyer's premium. (The invoiced buyer's premium will include the VAT).


Special VAT Treatment

If the Lot has one of the below symbols, the VAT treatment will be as follows:

VAT Symbol Basis Treatment

Standard UK VAT rules

20% VAT charged on both the hammer price and the buyer's premium

Imported lot under Temporary Admission (Low rate)

5% import VAT on the hammer price and 20% VAT on the buyer's premium

Ω

Imported lot under Temporary Admission (High rate)

20% import VAT on the hammer price and 20% VAT on the buyer's premium


Lots sold outside the Auctioneer’s Margin Scheme

If the buyer is a relevant business person in the EU (non-UK) or is a relevant business person in a non-EU country then no VAT will be charged on the buyer’s premium. This is subject to Phillips receiving evidence of the buyer's VAT registration number in the relevant Member State (non-UK) or the buyer's business status in a non-EU country such as the buyer’s Tax Registration Certificate. Should this evidence not be provided VAT will be charged on the buyer's premium.

EXPORTS FROM THE EUROPEAN UNION

The following types of VAT may be cancelled or refunded by Phillips on exports made within three months of the sale date if strict conditions are met:

  • The amount in lieu of VAT charged on the buyer’s premium for property sold under the Auctioneer’s Margin Scheme (i.e., without a VAT symbol).
  • The VAT on the hammer price for property sold under normal VAT rules (i.e., with a † or a Ω symbol).
  • The following type of VAT may be cancelled or refunded by Phillips on exports made within 30 days of the payment date if strict conditions are met:

  • The import VAT charged on the hammer price and an amount in lieu of VAT on the buyer's premium for property sold under temporary admission (i.e., with a ‡ or a Ω symbol) under the Auctioneer's Margin Scheme.

In each of the above examples, where the appropriate conditions are satisfied, no VAT will be charged if, at or before the time of invoicing, the buyer instructs Phillips to export the property from the EU. This will require acceptance of an export quotation provided by Phillips. If such instruction is received after payment, a refund of the VAT amount will be made

Where the buyer carries purchases from the EU personally or uses the services of a third party, Phillips will charge the VAT amount due as a deposit and refund it if the lot has been exported within the timelines specified below and either of the following conditions are met:

  • For lots sold under the Auctioneer’s Margin Scheme or the normal VAT rules, Phillips is provided with appropriate original documentary proof of export from the EU within three months of the date of sale. Buyers carrying their own property must obtain hand-carry papers from the Shipping Department to facilitate this process.
  • For lots sold under temporary admission, Phillips is provided with the original correct paperwork duly completed and stamped by HMRC which shows the property has been exported from the EU via the UK within 30 days of the payment date. It is essential for shippers acting on behalf of buyers to collect copies of original import papers from our Shipping Department. HMRC insist that the correct customs procedures are followed and Phillips will not be able to issue any refunds where the export documents do not exactly comply with governmental regulations. Property subject to temporary admission must be transferred to another customs procedure immediately if any restoration or repair work is to be carried out

Buyers carrying their own property must obtain hand-carry papers from the Shipping Department, for which a charge of £20 (plus any applicable VAT) will be made. The VAT refund will be processed once the appropriate paperwork has been returned to Phillips. Phillips is not able to cancel or refund any VAT charged on sales made to UK or EU private residents unless the lot is subject to temporary admission and the property is exported from the EU within 30 days of the payment date. We can only process VAT refunds where the VAT to be refunded is £50 or more per shipment. There will be a processing fee of £20 (plus any applicable VAT).

Buyers intending to export, repair, restore or alter lots under temporary admission should notify the Shipping Department before collection. Failure to do so may result in the import VAT becoming payable immediately and Phillips being unable to refund the VAT charged on deposit.

VAT REFUNDS FROM HM REVENUE & CUSTOMS

Where VAT charged cannot be cancelled or refunded by Phillips, it may be possible to seek repayment from HMRC . Repayments in this manner are limited to businesses located outside the UK and may be considered for example for Import VAT charged on the hammer price for lots sold under temporary admission.

If you are located in an EU member state other than the UK you will need to apply for a refund of UK VAT directly to your local tax authority. This is done via submission of an electronically based claim form which should be accessed through the website of your local tax authority. As a result, your form may include VAT incurred in a number of member states.

Time limits for claiming VAT refunds

  • If you are located in an EU member state other than the UK: Any claim must be made on a calendar year basis and submitted no later than 30 September in the following calendar year (e.g., for VAT incurred in the year 1 January to 31 December 2019 you should make a claim to your local tax authority no later than 30 September 2020). Once you have submitted the electronic form to your local tax authority it is their responsibility to ensure that payment is obtained from the relevant member states. This should be completed within four months. If this time limit is not adhered to you may receive interest on the unpaid amounts.
  • If you are located outside the EU you should apply for a refund of UK VAT directly to HMRC. Claim forms are available from the HMRC website. https://www.gov.uk.

You should submit claims for VAT to HMRC no later than six months from the end of the 12-month period ending 30 June (e.g., claims for the period 1 July 2019 to 30 June 2020 should be made no later than 31 December 2020).

Please note that refunds of VAT will only be made where VAT has been incurred for a business purpose. Any VAT incurred on articles bought for personal use will not be refunded.

SALES AND USE TAXES

Buyers from outside the UK should note that local sales taxes or use taxes may become payable upon import of lots following purchase. Buyers should consult their own tax advisors.