VAT and second-hand items question

I was looking at items for at a local auction recently and noted that the buyer was liable for VAT as well as the auctioneer's premium. I thought second-hand items were exempt from VAT, we're talking about 10 knick-knacks here (some damaged), not Van Goghs.

Roland.

Reply to
Roland Watson
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X-No-Archive: yes In message , Roland Watson writes

The amount involved is immaterial. I'm a VAT-registered trader. As such if I buy goods required in connection with my business and claim back the VAT, then subsequently sell the goods, I extract the VAT output from the money received from the sale and remit it back to customs and excise. That's my understanding of the convoluted VAT regulations but this requirement is common sense really.

On my last VAT inspection some years ago, I was complimented by the inspector for being one of the few traders she'd come across who extracted the VAT from annual telephone reconciliation payments from BT (I pay BT a fixed amount each month) and remit it back to customs and excise.

Reply to
JF

It depends on the source of the items. If the source is VAT registered then VAT applies to the Lot, otherwise you could buy goods and reclaim the VAT as an input, then sell via an auctioner and not pay output VAT. If the source isn't VAT registered then the auctioner should be claiming VAT on the total goods.

This whole thing is covered under the margin scheme (Notice 718). It's likely that if the auction is for say machine tools from a factory or stock from shop closing down then the input VAT was originally claimed so the margin scheme can't be used.

As always read the VAT guide to see, but for the most part section 2.7 says "yes for secondhand goods" section 2.9 says "but not if it's from a VAT registered trader"

Reply to
Peter Ibbotson

Surely the monthly "budget payment" is immaterial as far as vat goes, as vat is applied to your monthly or quarterly *invoice* that you get from BT.

Reply to
Adrian Boliston

But the money received back from BT will include their VAT as an output which I shouldn't pocket.

Reply to
JF

Yes, but some items are VAT-exempt, right? VAT registered companies don't add VAT to kid's clothes do they?

Roland.

Reply to
Roland Watson

Yes, they do, but at the appropriate rate, which is 0% for kid's clothes. This is not the same thing as being VAT-exempt.

Reply to
Alec McKenzie

So 0% VAT is not VAT-exempt?

Typical government tax bureaucracy!

Reply to
Roland Watson

"Roland Watson" wrote

Exactly.

"Roland Watson" wrote

Well, they need some way to determine whether to allow you to reclaim your input VAT or not....

[Generally, input VAT relating to zero-rated ("VAT = nil") supplies *can* be reclaimed, but input VAT relating to VAT-Exempt supplies might not be.]
Reply to
Tim

Next they'll be telling us about "outside the scope" and pretending that that's something else again!

Matti

Reply to
Matti Lamprhey

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