How Auction Houses Earn Their Money
Auction houses charge commission on every sale, and they collect it from both sides of the transaction. The seller pays a fee, and so does the buyer. This double charge might seem unusual if you are new to auctions, but it has been standard practice in the UK for a long time.
For sellers, this means a percentage of your final sale price goes to the auction house. For buyers, you pay the hammer price plus an additional charge on top. Both parties also pay VAT on their respective commission fees, though VAT is not usually applied to the item price itself.
The Two Types of Commission
Vendor's commission is what sellers pay. This is calculated as a percentage of the final hammer price and is deducted automatically before the auction house sends you your proceeds. You will not need to pay this separately as it comes straight off the top.
Buyer's premium is the charge added to what buyers pay. When you win a lot, the price you actually hand over will be the hammer price plus this premium, plus VAT on the premium. The total can be noticeably higher than the figure the auctioneer called out when the hammer fell.
VAT at 20% applies to both types of commission in most cases. This is charged on the commission amount, not on the sale price of the item. Some specialist sales or imported goods may have different VAT arrangements, so check with the auction house if you are unsure.
Your situation may be slightly different. ask a question below ↓ and our editorial team will reply with our advice.
What Rates Can You Expect
Commission rates vary considerably between auction houses. Vendor's commission can range from around 8% at the lower end up to 20% or more at some larger or specialist houses. The rate may depend on the type of item, its estimated value, or the auction house's own pricing structure.
Buyer's premium also varies. Many UK auction houses charge somewhere between 20% and 28%, though this differs by saleroom and category. Some regional auction houses offer lower rates, while prestigious London houses may charge more.
It pays to ask about rates before committing to sell through any particular house. A few percentage points can make a real difference to your final return, especially on higher value items. Most auction houses publish their commission rates on their websites or will provide them on request.
What This Means in Practice
If you are selling, factor in the vendor's commission and VAT when estimating what you might actually receive. An item that sells for £500 could leave you with considerably less once fees are taken off. Ask the auction house for a clear breakdown before you consign anything.
If you are buying, remember that the hammer price is just the starting point. Add the buyer's premium and VAT to work out what you will actually pay. Some auction houses display the total including premium on their bidding screens or invoices, but others do not, so it helps to do the maths yourself before bidding.
Additional charges may also apply. Some houses charge for photography, lotting, insurance, or unsold items. These vary by auction house, so read the terms and conditions or ask directly before you proceed.
For general guidance on VAT and how it applies to auction sales, GOV.UK provides information on second hand goods schemes and margin schemes that may be relevant.
Understanding how commission works helps you budget properly, whether you are clearing a house, collecting, or simply curious about what auctions might offer. Once you know the numbers, there are few surprises.
£10,000 minus the buyers commission plus VAT, then minus the sellers commission plus VAT
I would rather burn or scrap the goods than pay our thieving government any more moneyin tax
how much should the bill be?
Bearing in mind the commission and vat
This is now making Auction buying unprofitable.
Most don't even offer in house packaging and shipping which is an additional cost at around £15 / item (discounts for additional purchases accepted). This is not unreasonable as these companies need to make a profit themselves but an additional cost all the same.
Please advise which are 10% I will certainly use them.
go and sell at a boot sale and see if you get top price for your wears.
you know before you sell so stop moaning and get on with it.
It states that buyers and sellers both pay premiums and that 'historically, that’s the way auctions have operated in this country.'
In fact this is NOT the case.
The buyer did not pay a premium there was only a sellers premium - this I believe was true for ALL auctions. It was not until the 1980's that buyers premium were introduced. Since then auction houses have become increasingly greedy.
If this website is supposed to be factual it is extremely important that the data given is correct.
I haven't read more but maybe there are other important factual errors - NOT GOOD
in May, gave a list of prices paid or lower required - all at a reserve
Firstly, they sold the 2 main items a childs bike and car they said would be "good sellers" but they were sold for £10 less than the price quoted
other items were practically given away, like a lamp which was £80 I put
£50 required on list, sold it for £14 - and a folding wooden chair cost £45 sold for same, I kept returning, never got back to me, in the end 2 months later
I went and was given a cheque for £138 when the asking prices amounted to
£380.
Reply e mails from Gerrards saleroom st annes, say were so sorry for your
sad situation, and we did our best, a load of rubbish - I am trying to find an
ombudsman, tapped in Auctioneer salerooms - and property comes up - is
this why they are so outrageously wrong, they know theres nothing can be
done to get some justice.
Actually it makes me sick thinking about it. I honestly feel like I've been robbed.
I will be avoiding eBay from now on. It's not the concept of fees for a service that I find offensive. It's the sneaky way they are added on. I need to find a sellers marketplace where they are up front about costs and don't sneakily take my money like a bloodsucking leech.
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