VAT & Buyer's Premium at UK Auctions Explained (2026)
The two charges that catch out UK auction buyers: buyer's premium and VAT. How 'plus VAT' lots, the VAT margin scheme, and premium-plus-VAT work - with worked examples so you know your true cost before you bid.
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UK VAT is 20%, and at government and surplus auctions it can apply twice: on the buyer's premium (almost always) and on the hammer price itself when a lot is sold "plus VAT". The premium is set in each sale's terms, commonly somewhere around 10% to 20% of the hammer price. On a £5,000 plus-VAT lot with a 15% premium you pay £5,000 + £1,000 VAT + £750 premium + £150 VAT on the premium = £6,900, which is 38% above the hammer price. VAT-registered businesses can usually reclaim the VAT on plus-VAT lots and on the premium; private buyers cannot.
Buyer fees by auction house (checked October 2026)
| Auction house | Buyer's premium | VAT | Pay within | Collect within |
|---|---|---|---|---|
| Wilsons Auctions | Set per sale, shown on the lot | See the sale terms | See the sale terms | See the sale terms |
| NCM Auctions | 25% + VAT (15% + VAT at plant and machinery sales) | Prices exclude VAT; VAT added where it applies | 2 days | By the sale's clearance date |
| Ramco | Set per sale (15% or 20% in recent sales) + VAT | Added to the hammer price, premium and lot charges | By the sale's final payment date | By the sale's clearance date |
| BPI Auctions | Set per sale, shown next to the sale title, + VAT | Added to the lot unless the sale says it is not chargeable | 48 hours | 7 days from auction close |
| Eddisons | 15% + VAT | Added to the lot at the applicable rate | 4pm next working day, unless the catalogue says otherwise | By the catalogue's removal date (default 4pm next working day) |
| Witham Specialist Vehicles | 25% + VAT, minimum £10 a lot | All bids are plus VAT | 3 working days from invoice | 7 days from invoice |
| Apex Auctions | 18% + VAT, unless the sale information says otherwise | Charged at the prevailing rate | At auction close, by bank transfer | By 4pm on the sale's final clearance day |
A £5,000 Land Rover at Witham costs £5,000 + £1,250 premium (25%) + £1,250 VAT (20% of £6,250) = £7,500.
This guide explains exactly how both work in the UK in 2026, with worked examples.
The Hammer Price Is Not Your Total
Your true cost at a UK auction is:
Hammer price + buyer's premium (+ VAT on the premium) + any VAT on the lot + collection/transport.
Get into the habit of calculating that full figure before you place a bid, and making it your walk-away limit.
Buyer's Premium
The buyer's premium is a fee the auction house charges the winning bidder, on top of the hammer price. It's how commercial auctioneers earn their margin.
- Rates vary by auctioneer and lot type, but roughly 10–20% of the hammer price is typical at the auction houses handling UK government surplus.
- VAT is normally charged on the premium itself at 20%, even when it isn't charged on the lot. So a 15% premium effectively costs 18% once VAT on the premium is added.
- Some online-only sales and platforms publish their premium clearly in the lot terms - always read it before bidding.
- Premium: £750
- VAT on premium (20%): £150
- Premium total: £900
VAT on the Lot Itself
This is where UK auctions get genuinely confusing, because there are two completely different VAT treatments, and the lot will tell you which one applies.
"Plus VAT" lots
Many government, business and ex-fleet lots are sold plus VAT, meaning 20% VAT is added to the hammer price.
- A £10,000 winning bid on a plus-VAT lot becomes £12,000 before any premium.
- VAT-registered businesses can usually reclaim this VAT, so the real cost to them is closer to the net figure.
- Private (non-registered) buyers cannot reclaim it - the VAT is a genuine added cost.
If you're a private buyer, factor the full 20% into your maths. If you're a VAT-registered business buying for business use, you can typically recover it on your VAT return - but keep the VAT invoice.
VAT margin scheme lots
Many second-hand goods are instead sold under the VAT margin scheme (and the related auctioneers' scheme).
- Under the margin scheme, VAT is charged only on the auctioneer's or seller's margin, not on the full price.
- Crucially, VAT is not shown separately on a margin-scheme invoice - so you won't see a "+VAT" line, and a VAT-registered buyer generally cannot reclaim input VAT on the purchase.
- This is common for used consumer goods, jewellery and some vehicles.
The practical upshot: a margin-scheme lot usually has no visible VAT to add to your bid, whereas a "plus VAT" lot does. Always check the lot's stated VAT status.
Putting It Together - Worked Examples
- Hammer price: £6,000
- VAT on lot (20%): £1,200
- Buyer's premium (15%): £900
- VAT on premium (20%): £180
- Total payable: £8,280 (van that "sold for £6,000")
- Hammer price: £6,000
- VAT on lot (20%): £1,200 (reclaimable)
- Buyer's premium (15%): £900
- VAT on premium (20%): £180 (reclaimable)
- Net cost after reclaiming VAT: ~£6,900
- Hammer price: £400
- VAT on lot: none shown (margin scheme)
- Buyer's premium (20%): £80
- VAT on premium (20%): £16
- Total payable: £496
The same headline strategy applies whatever the scheme: read the VAT status, add the premium and its VAT, and only then decide your maximum bid.
Tips to Avoid VAT and Premium Surprises
Read the lot's VAT status every single time. "Plus VAT", "VAT margin scheme" and "no VAT" mean very different totals.
Find the premium rate before bidding. It's in the auction's terms and conditions; don't assume it matches another sale.
Remember VAT applies to the premium too. Even a "no VAT" lot usually carries VAT on the buyer's premium.
Keep your VAT invoice if you're a business. You'll need it to reclaim VAT on plus-VAT lots.
Don't forget collection. Everything is collection-only; transport is a real cost on top of premium and VAT.
Frequently Asked Questions
How much is VAT at UK auctions?
UK VAT is 20%. On "plus VAT" lots, 20% is added to the hammer price - a £10,000 bid becomes £12,000. VAT is also normally charged at 20% on the buyer's premium. Some second-hand goods are sold under the VAT margin scheme, where VAT applies only to the seller's margin and isn't shown separately on the invoice.
What does "plus VAT" mean at an auction?
It means 20% VAT will be added to your hammer price. A £10,000 winning bid on a "plus VAT" lot costs £12,000 before the buyer's premium. VAT-registered businesses can usually reclaim this VAT; private buyers cannot, so they should budget for the full 20% on top of their bid.
How much is the buyer's premium at UK government auctions?
It varies by auction house and lot, but roughly 10–20% of the hammer price is typical, and VAT at 20% is normally charged on the premium itself. Always check the specific auction's terms and conditions, because rates and VAT treatment differ between auctioneers and lot types.
Can I reclaim VAT on an auction purchase?
If you're a VAT-registered business buying for business use, you can usually reclaim the VAT on a "plus VAT" lot and on the premium, provided you keep the VAT invoice. You generally cannot reclaim VAT on margin-scheme lots, because the VAT isn't shown separately. Private buyers cannot reclaim VAT at all.
What is the VAT margin scheme?
The VAT margin scheme is a way of charging VAT on certain second-hand goods only on the seller's or auctioneer's profit margin, rather than the full selling price. The VAT isn't itemised separately on the invoice, so there's no visible "+VAT" to add - but a VAT-registered buyer generally can't reclaim input VAT on that purchase.
The Bottom Line
UK auction maths is simple once you know the rule: hammer price, plus the buyer's premium and its VAT, plus any VAT on the lot, plus transport. Work that total out before you bid and make it your limit. Our true cost calculator does the sums, and GovAuctions lists lots from six UK sellers (Witham, Ramco, Eddisons, NCM Auctions, BPI Auctions and Apex Auctions) in one feed. For vehicles, see also V5C, MOT and registration after an auction and ex-MoD vehicles. Always confirm the premium and VAT status on the original auctioneer's terms before you commit.
