Finance Act, 1995

Special scheme for auctioneers.

127.—The Principal Act is hereby amended by the insertion of the following section after section 10A (inserted by this Part):

“10B.—(1) In this section—

‘auctioneer’ means a taxable person who, in the course or furtherance of business, acting on behalf of another person pursuant to a contract under which commission is payable on purchase or sale, offers tangible movable goods for sale by public auction with a view to handing them over to the highest bidder;

‘auctioneer's margin’ means an amount which is equal to the difference between the total amount, including any taxes, commissions, costs and charges whatsoever, payable by the purchaser to the auctioneer in respect of the auction of auction scheme goods and the amount payable by the auctioneer to the principal in respect of the supply of those goods and shall be deemed to be inclusive of tax;

‘auction scheme’ means the special arrangements for the taxation of supplies of auction scheme goods;

‘auction scheme goods’ means any works of art, collectors' items, antiques or second-hand goods sold by an auctioneer at a public auction while acting on behalf of a principal who is—

(a) a person, other than a person referred to in paragraph (c), who was not entitled to deduct, under section 12, any tax in respect of that person's purchase, intra-Community acquisition or importation of those goods:

Provided that person is not a taxable person who acquired those goods from—

(i) an auctioneer who applied the auction scheme to the supply of those goods to that taxable person, or

(ii) a taxable dealer who applied the margin scheme to the supply of those goods to that taxable person,

or

(b) a person in another Member State who was not entitled to deduct, under the provisions implementing Article 17 of Council Directive No. 77/388/EEC of 17 May 1977, in that Member State, any value-added tax referred to in that Directive in respect of that person's purchase, intra-Community acquisition or importation of those goods, or

(c) a taxable dealer who applied the margin scheme to the supply of those goods or applied the provisions implementing Article 26a (inserted by Council Directive No. 94/5/EC of 14 February 1994) of Council Directive No. 77/388/EEC of 17 May 1977, in another Member State to the supply of those goods;

‘principal’ means the person on whose behalf an auctioneer auctions goods;

‘purchaser’ means the person to whom an auctioneer supplies auction scheme goods.

(2) Subject to and in accordance with the provisions of this section, an auctioneer shall apply the auction scheme to any supply of auction scheme goods.

(3) Notwithstanding section 10, the amount on which tax is chargeable, by virtue of section 2 (1) (a), on a supply by an auctioneer of auction scheme goods shall be the auctioneer's margin less the amount of tax included in that auctioneer's margin.

(4) Where auction scheme goods are auctioned, the auctioneer shall issue, subject to such conditions (if any) as may be specified in regulations, to both the principal and the purchaser, invoices or documents in lieu thereof setting out the relevant details in respect of the supply of the auction scheme goods.

(5) Notwithstanding section 17, an auctioneer shall not, in relation to any supply to which the auction scheme has been applied, indicate separately the amount of tax chargeable in respect of the supply on any invoice or other document in lieu thereof issued in accordance with that section.

(6) Where auction scheme goods are auctioned by an auctioneer on behalf of a principal who is a taxable person, the invoice or document in lieu thereof issued to the principal in accordance with subsection (4) shall be deemed to be an invoice for the purposes of section 17, and the said principal shall be deemed to have issued same.

(7) Where the auction scheme is applied to a supply of goods dispatched or transported from the State to a person registered for value-added tax in another Member State then, notwithstanding paragraph (i) (b) of the Second Schedule, the provisions of section 11 (1) (b) shall not apply, unless such goods are of a kind specified elsewhere in the Second Schedule.

(8) Notwithstanding section 3 (6) (d), where the auction scheme is applied to a supply of goods dispatched or transported, the place of supply of those goods shall be deemed to be the place where the dispatch or transportation begins.

(9) Where an auctioneer supplies tangible movable goods by public auction, the principal shall be deemed to have made a supply of the auction scheme goods in question to the auctioneer when the said auctioneer sells those goods at a public auction.

(10) Notwithstanding paragraph (xxiv) of the First Schedule, where a taxable person acquires goods to which the auction scheme has been applied and that person subsequently supplies those goods, the provisions of that paragraph shall not apply to that supply.”.