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Hi My boss has sold some products in auction, he's given me a recipt from the auctioneer which says that out "lots" are marked "M" and are within the auctioneers VAT margin.

hammer price was £1341. VAT £214.56. £Chq we received is 1141.28.

My quetion is do we now have to PAY VAT too as a sale to the auction house or create a sales invoice using the gross slaes amount sold at auction?

Many thanks for you time.

Not sure about this, where does your VAT figure of £214.56 come from?

The financial transactions that I would expect to happen where the margin scheme is used:- you sell the goods to the auction house, they then sell them on. They charge VAT to the buyer on their margin, you account for VAT on your sale to the Auction house.

The VAT figure you quote doesn't make any sense to me!

Does this help?

More info here

http://customs.hmrc.gov.uk/channelsPort ... e=document