Invoices
If you are successful at auction then you will need to pay for the lot(s) you have won. Invoices are usually sent out by email at the end of the day or the day after the auction depending on the finishing time. This will be sent to the email that you provided on registration. Depending on the method you used to bid there may be extra charges included in your invoices.
In my previous articles on the subject of buying I state the importance of knowing the auction house’s buying charges. The main charge to know about when buying is the buyer’s premium. This is a percentage of the final hammer price that you have to pay to the auction house and tends to be around 18%-25% plus VAT making the total around 21%-30% including VAT. Therefore, if you buy a lot for £1,000 you may pay up to £1,300 when the buyer’s premium is added. The auctioneer’s buyers premium should be clearly stated in the catalogue or on the ‘how to buy’ section of their website. You may also need to pay a higher or lower charge depending on the lot’s VAT status. The example above is for a lot using the Margin scheme, which accounts for the majority of lots sold at auction. For more information on buyers premium and the other VAT statuses please read my article on the topic here.
There are many ways to pay your invoice once it has been received. You can pay by bank transfer, cheque or by card through the auctioneer’s website. Paying by bank transfer is the easiest and most universally available payment method. There is no payment limit and is the quickest way of sending the funds to the auction house. The auctioneer’s bank details will be included in the invoice provided or on the auctioneer’s website. Cheque payment is also available, however, as times are changing, this payment method is becoming more scarcely available as it is slower and takes longer for the auction house to process and hence release the lots for collection. Finally is payment through the auctioneer’s website. If available this will be linked in the invoice email and will redirect you to a payment page. The layout can vary but it is a fairly simple process if you are used to paying for products on other websites. Card payments through the website may also have a payment limit depending on their terms. These vary widely but can range from £2,000 to unlimited.
You can also pay for lots in person at the auction house with cash and card. Cash will often be limited to a maximum of £5,000 for anti money laundering reasons. Card payment is similar to paying with your card at a high street store. There will be a payment terminal where you insert your card and enter your pin. Your payment will then be processed and a receipt will be stapled to a PDF of your invoice.
When paying for your lots it is possible to make your invoice VATable or VAT exempt. A VAT invoice is when all lots (excluding zero-rated) will be made ‘standard’ so VAT is added to the hammer price and buyers premium. This is usually done by businesses when purchasing as they can reclaim the VAT paid at a later date. This is a fairly common occurrence so if you own a business don’t be afraid to ask the auctioneer if this is possible. In this case, a lot worth £1,000 with a 25% buyer’s premium would cost you £1,500 (£1000+(200VAT)+£250+(£50VAT)). A VAT-exempt invoice is the opposite and removes all VAT from the invoice. This is only relevant if you are buying from abroad and don’t need to pay VAT in the UK. For a lot worth £1,000 you would pay a total of £1,250 (£1,000+£250).
For more information on VAT and the Auctioneers’ Scheme please click here.
Depending on the auction house’s terms and conditions you will have a certain amount of time to pay for your lots. Most auctioneers ask for payment within seven days of the auction but do check their buying terms. If you fail to pay they will chase you for payment, and depending on their policy they may even resort to a collection agency.
Your invoice may also include further charges such as ARR, live bidding charges or costs for postage and packing. To find out more about these charges please click the links to my articles on the subject.
You will not be able to collect your lots until they are fully paid for and if you fail to pay you may be banned from bidding with that auction house in the future. If you fail to pay for your lots when bidding through an auction platform such as the-saleroom.com this information will be passed on to other auctioneers who may see this and revoke your permission to bid. This concludes my article on auction invoices. For more information on buyers premium please read my article on the topic.
