The Real Cost of Buying at Auction: Hammer Price, Buyer's Premium and VAT

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Key points

• You pay the hammer price, the buyer's premium, any applicable internet surcharge, VAT where it applies to the lot and to both charges, and your own collection or delivery costs.
• The internet surcharge is easy to miss. Both it and the premium are stated on each lot's Additional Fees tab, and both carry VAT at 20%.
• There are no standard listing, card-processing or buyer administration fees, but contractual charges can arise following late payment, default, delayed collection, storage, abandonment or debt recovery.
• Sellers receive 100% of the hammer price together with any applicable VAT, without commission deductions. The buyer-side charges fund the sale.
• Universal Auctions Group Ltd acts solely as auctioneer and agent for the vendor. The contract of sale is formed between the vendor and the successful bidder, and our auctions are trade-only.
• VAT recovery is not automatic: it depends on your VAT registration, taxable business use, the individual lot's VAT treatment and valid VAT documentation. Some lots carry no VAT on the hammer price.
• Payment is due in full by bank transfer within 24 hours of receiving the invoice.
• Set your maximum bid by working backwards from the finished value, taking off the work, your return and any irrecoverable VAT, then dividing by one plus the premium and surcharge rates rather than subtracting them.

Quick answer

The hammer price is the start of the number, not the end of it. On top of it you pay a buyer's premium, any applicable internet surcharge, VAT where the lot is VAT-qualifying, VAT on both of those charges, and then the cost of getting the lot off site and into work. There are no standard listing, card-processing or buyer administration fees, though contractual charges can arise if you pay or collect late. Our auctions are trade-only. Work out the all-in figure first, then set your maximum bid from it.

What do you actually pay when you win a lot at auction?

You pay the hammer price you bid, the buyer's premium stated on that lot's Additional Fees tab, any applicable internet surcharge stated in the same place, VAT where it applies to the lot and to both of those charges, and your own collection or delivery costs. Add all of that up before you bid and you will know your real ceiling.

Most buyers who get caught out are not caught by a fee they were not told about. They are caught by adding one percentage to the hammer price in their head, winning the lot, and only then pricing the low-loader. That is why we deal with the whole number here rather than the fees alone. Universal Auctions Group Ltd acts solely as auctioneer and agent for the vendor, and the contract of sale is formed between the vendor and the successful bidder. Our auctions are trade-only: bidders register and purchase in a business capacity. You can see what is currently open across our commercial vehicle auctions and our plant machinery auctions, and every sale states its own terms, which are the ones that govern the lot you are bidding on.

The number that matters is the all-in cost of putting the asset to work, not the figure on the bid screen.

What is the buyer's premium and why is it charged?

The buyer's premium is a percentage added to the hammer price and payable by the buyer. It is one of the buyer-side charges that fund the sale, because our sellers pay us no commission, no listing fee and no entry fee. An internet surcharge may also apply, so the premium is not the only charge on top of the hammer price. The rates that apply are stated on each lot's Additional Fees tab, so check them on the lot you are bidding on and build both into your maximum before you start.

It is worth understanding why the model works this way, because it changes what turns up in the catalogue. A seller who receives 100% of the hammer price together with any applicable VAT, and whose stock never leaves their own site until it is sold and paid for, has very little reason to hold back and sell privately instead. That is what keeps genuine trade stock coming through, and the buyer-side charges are the buyer's side of that arrangement. Treat them as part of the purchase price rather than as fees bolted on afterwards, and the arithmetic stays honest.

Which costs do we not charge?

There are no standard listing fees, no card-processing charges and no buyer administration fees on a lot you pay for and collect on time. What you pay is the hammer price, the buyer's premium, any applicable internet surcharge and the VAT that applies. Contractual charges can arise, however, following late payment, default, delayed collection, storage, abandonment or debt recovery, so the clean number depends on you meeting the payment and collection terms.

• Registration. You create an account and accept the sale terms. Registration may require manual approval and identification, and requirements vary by bidding platform, so check the platform you are bidding on.
• Placing a bid. The bid itself is legally binding acceptance of the terms and a commitment to complete if you win. Bids cannot be withdrawn.
• Payment. We raise a manual invoice after the sale and you settle it in full by bank transfer. We do not accept cash, cheques or card payments, so there is no card surcharge.
• Deposits. No deposit is taken at registration on our own sale terms, but an export VAT deposit does apply where you are buying to export, and platform requirements vary.
• Admin. No standard documentation fee, lot fee or buyer registration fee. Default charges are a different matter: see the terms.

Those default charges are worth knowing before you bid rather than after. Under our terms, failure to pay on time can lead to interest at 8% a year calculated daily on the outstanding invoice, an administration fee of £295, and referral to a commercial debt recovery company with the buyer liable for recovery and legal costs including 15% of the total invoice. Late collection brings its own charges: storage is charged per lot per day, and a lot left uncollected long enough can be treated as abandoned. Read the terms for the sale you are bidding in.

One thing to plan for rather than budget for: because payment is by bank transfer against an invoice we raise manually, the money needs to be available in the right account when the invoice lands. Payment is due in full within 24 hours of receiving the invoice, and goods are released for collection once payment has cleared, so a buyer waiting on a facility to draw down is a buyer whose removal window is already running.

How does VAT work on an auction lot?

It depends on the lot. VAT at 20% applies to the hammer price unless the lot description states otherwise, and some lots are sold with no VAT on the hammer price, so check the VAT status shown against each individual lot rather than assuming a category-wide position. VAT is charged on the buyer's premium and on the internet surcharge in every case. Whether you can recover any of it depends on your own VAT position, not on the lot alone.

• VAT-qualifying (plus VAT). What you are charged: VAT at 20% on the hammer price, the premium and the surcharge. What recovery depends on: Your VAT registration, taxable business use, the lot's treatment and valid VAT documentation.
• Margin scheme goods. What you are charged: No separately recoverable VAT on the hammer price. What recovery depends on: Nothing recoverable on the hammer price. VAT remains chargeable on our buyer-side services.
• Buyer's premium. What you are charged: VAT at 20% on the premium. What recovery depends on: Normally recoverable only where you meet HMRC's applicable input-tax requirements.
• Internet surcharge. What you are charged: VAT at 20% on the surcharge. What recovery depends on: Normally recoverable only where you meet HMRC's applicable input-tax requirements.
• Export sale. What you are charged: VAT taken as a refundable deposit on the lot. What recovery depends on: Refunded on acceptable proof of export within 28 days of invoice under our terms. VAT on the premium is never refundable.
• Not VAT registered. What you are charged: All VAT charged. What recovery depends on: Nothing recoverable. VAT is a real cost, so price it in fully.

For a trade buyer who meets the recovery conditions, VAT on a qualifying lot is a cashflow question rather than a profit question: you fund it, then you recover it. Where the conditions are not met, the applicable rate and treatment still depend on the individual lot and the transaction, and the VAT is money that does not come back. It is the single most common reason a bid that looked comfortable turns out not to be. Where goods are sold under a VAT margin scheme, no separately recoverable VAT is shown on the hammer price, but VAT remains chargeable on our buyer-side services.

What does a winning bid actually cost, end to end?

Take an illustrative van bought at a £6,000 hammer price. Using an illustrative 15% buyer's premium of £900, an illustrative 3% internet surcharge of £180, VAT at 20% on all three of £1,416, transport of £250 and recommissioning of £600, the all-in figure is about £9,346. The percentages that actually apply are stated on the lot's Additional Fees tab. The shape of the build-up does not change even when the rates do.

Illustrative worked example only, using a 15% buyer's premium, a 3% internet surcharge and VAT at 20% on the hammer price, the premium and the surcharge. The rates that apply to a lot are stated on its Additional Fees tab, and transport and recommissioning vary by sale, lot and location.

In that example the £6,000 you bid becomes roughly £9,346 before the van turns a wheel for you, and £1,416 of that is VAT. Whether that VAT comes back depends on your VAT registration, taxable business use of the van, the lot's VAT treatment and your holding valid VAT documentation. Where those conditions are met the real cost sits around £7,930. Both numbers matter, and they matter at different moments: the higher one is what has to leave your bank, and the lower one is what the asset costs you.

The layers, in order: hammer price, the buyer-side charges including the internet surcharge, VAT on all of them, then collection and transport. Set your maximum bid so the top of the stack, not the bottom, is the number you can live with.

What does it cost to get the lot off site?

That depends on the asset, the distance and whether it can be driven. It is also the one cost you can find out before you commit: email us the lot number and your postcode and we can obtain a no-obligation transport quotation while the auction is still running. Collection and transport remain your responsibility unless separately agreed. A van you can drive away might cost you a train fare and a tank of fuel. A tracked machine needs a suitable trailer, and that is real money.

Collection is from the seller's own site, because the stock stays with the vendor until it is sold and paid for. That is good for the seller and it means access is a genuine question for you: gate widths, ground conditions and whether an artic can turn round are worth asking about before you bid rather than after. Collection is by prior appointment, each lot carries a removal deadline in the sale terms, and missing it brings storage charges. There is more detail in our guide to where to find auction deals online and in the category guides for buying HGVs and trucks at auction.

What costs land after the lot reaches your yard?

The costs that decide whether the buy was any good. Lots are sold under the applicable auction terms, based on the vendor's own descriptions and photographs, without a condition report or mechanical appraisal from us, so budget for what the asset needs before it earns: service items, tyres, an MOT or test where one is required, remedial repairs, sign-writing removal on an ex-fleet vehicle, and rigging or recommissioning on a machine. Put a realistic figure on this before you bid, and add a contingency, because vendor-supplied photographs may not reveal every aspect of an asset's condition.

• Service and consumables. Typically applies to: Almost everything. How to allow for it: Check the service record and inspect, then allow for what you cannot confirm.
• Tyres, tracks or undercarriage. Typically applies to: Vehicles and tracked plant. How to allow for it: Judge from photographs, then allow for one step worse.
• MOT or statutory test. Typically applies to: Vans, trucks, trailers. How to allow for it: Check the free GOV.UK MOT history before bidding. Whether a test is required depends on the vehicle and its intended use.
• Presentation. Typically applies to: Ex-fleet stock, resale stock. How to allow for it: Livery removal, paint, valet, photography.
• Recommissioning. Typically applies to: Machinery, machine tools. How to allow for it: Rigging, siting, connection and test.
• Contingency. Typically applies to: Every lot you have not inspected. How to allow for it: A fixed percentage of the hammer price, held back.

We do not inspect the assets, we do not produce condition reports, and we do not warrant condition, description, mileage, hours or fitness for purpose. Lots are listed from the vendor's own details and photographs. Viewing is strictly by prior appointment and is strongly recommended, and on anything mechanical it is worth the journey. Where you cannot inspect, the contingency line is doing that job instead, so make it a real number rather than a comforting one.

How do you set your ceiling from the all-in cost?

Work backwards, not forwards, and divide the percentage charges out rather than subtracting them. Start from what the asset is worth to you finished. Subtract transport, repairs, recommissioning, your contingency, any irrecoverable VAT and the margin or return you need. Then divide what is left by one plus the premium rate plus the surcharge rate. That gives your hammer-price ceiling. Write it down before the sale and do not move it once bidding starts.

1. Start with the finished value. Realistic resale or utilisation value, based on what comparable assets have actually sold for rather than what they are advertised at.
2. Take off the work. Transport, repairs, service, test, presentation and recommissioning, plus a contingency for the unseen.
3. Take off your return. The margin or the payback you need for the money and the time. If this line is zero, you are not trading, you are collecting.
4. Take off any irrecoverable VAT. If you cannot recover the VAT, it is a cost and belongs here rather than in the cash plan.
5. Divide out the percentage charges. Divide the remaining figure by one plus the buyer's premium rate plus the internet surcharge rate. Do not subtract them as flat sums: they scale with the hammer price, so subtraction always leaves your ceiling too high, and it double-counts if you have already added VAT on them.
6. That is your ceiling. Enter it as a maximum bid and let the platform work up to it, according to that platform's bidding rules and increments.

Setting a true ceiling early also suits how our sales close. Lots close at staggered published times, and where a valid bid is placed during a lot's final ten minutes that lot receives a ten-minute extension, repeating each time a further valid bid is accepted in the final ten minutes. Nobody wins by beating the clock, only by beating the price. A number you decided calmly beforehand is worth a great deal more than one you decide at 9pm with the countdown running. Our guide to how online industrial bidding works covers the format in full.

What changes if you are buying to export?

The VAT treatment changes and the logistics get heavier. We are EORI registered, which does not make us the exporter, the exporter of record or your customs agent. On an export sale the VAT is taken as a refundable deposit rather than waived at the point of sale, and it is refunded once you provide acceptable evidence of export within 28 days of invoice under our terms. VAT on the buyer's premium is not refundable in any circumstances, and the same applies to VAT charged on the internet surcharge. Tell us before the sale so the paperwork and the timings are agreed in advance.

Two things follow from that for your budget. First, you fund the VAT deposit up front even though you expect it back, so it is a cashflow line, and on a large lot it is a significant one. If acceptable evidence is not provided in time the deposit is forfeited. Second, export sales remain subject to the destination, the type of asset, sanctions, export controls, customs requirements and acceptable proof of export, which means the shipping arrangements are part of the purchase decision rather than an afterthought. Overseas trade buyers bid on UK stock in our sales regularly, and online bidding means you do not need to be in the country to buy. You do need the export leg planned before you commit.

Common mistakes to avoid

• Budgeting the hammer price and nothing else. The premium, the internet surcharge, the VAT and the transport are not extras. They are the purchase.
• Looking for the premium and missing the surcharge. Both are stated on the lot's Additional Fees tab, and both carry VAT.
• Assuming VAT comes back. Recovery depends on your VAT registration, taxable business use, the lot's treatment and valid documentation. Check the lot description too, because some lots carry no VAT on the hammer price.
• Subtracting percentage charges instead of dividing them out. They scale with the hammer price, so a ceiling built by subtraction is always too high.
• Pricing transport after winning. Send us the lot number and your postcode and get a transport quotation before the auction ends, while you can still change your mind.
• Setting no contingency. We do not inspect the assets or produce condition reports, and vendor photographs may not reveal every aspect of condition, so the money you have not allowed for is the money you will spend.
• Raising your ceiling mid-sale. Bids are binding and cannot be withdrawn. Decide the number when you are calm and hold it.

About this guide, and where to check the terms

Last reviewed 5 August 2026. This guide is general information for trade buyers and is not tax, legal or financial advice. Every percentage used in the worked examples is illustrative. The buyer's premium and internet surcharge that apply to a lot are stated on that lot's Additional Fees tab, and the terms of the individual sale govern the lot, so check both before you bid and take your own VAT advice where the position matters.

• Auction terms and conditions. The full fee, VAT, payment, collection, storage and export provisions: universalauctionsgroup.com/terms-and-conditions.
• Buyer's premium and internet surcharge. The rates applying to a lot are shown on that lot's Additional Fees tab on the lot page, and the charging provisions are in the auction terms.
• VAT treatment. Set out in the auction terms and against each individual lot. HMRC guidance on VAT margin schemes.
• Payment deadline. Bank transfer only, in full, within 24 hours of receiving the invoice: account and invoicing terms.
• Collection costs and export requirements. Collection is by prior appointment after cleared payment, and the export VAT deposit and 28-day evidence period are in the auction terms. For a transport quotation, contact us.
• Current sales. Commercial vehicle auctions and plant machinery auctions.

Universal Auctions Group Ltd, registered in England and Wales, company number 14944658. Registered office: First Floor Office 3, Hornton Place, London W8 4LZ. Telephone +44 (0) 330 332 5232. Email info@universalauctions.group. Universal Auctions Group Ltd acts solely as auctioneer and agent for the vendor and is not a party to the contract of sale, which is formed between the vendor and the successful bidder. We do not inspect the assets or produce condition reports and do not warrant condition, description, mileage, hours or fitness for purpose.

Frequently asked questions

What is a buyer's premium at auction?

A percentage added to the hammer price and payable by the buyer. It is one of the buyer-side charges that fund the sale, because sellers pay no commission, no listing fee and no entry fee and receive 100% of the hammer price together with any applicable VAT. The rate that applies to a lot is stated on that lot's Additional Fees tab, and VAT at 20% is charged on the premium. Build it into your maximum bid before you start.

Is the buyer's premium the only charge on top of the hammer price?

No. An internet surcharge may also apply to a lot, charged as a further percentage of the hammer price, and it is stated on the same Additional Fees tab as the premium. VAT at 20% is charged on the surcharge as well as on the premium. Buyers who budget for the premium alone and miss the surcharge are the ones whose arithmetic goes wrong.

Do you charge any other fees?

There are no standard listing fees, card-processing charges or buyer administration fees on a lot you pay for and collect on time. Contractual charges can arise if you do not: under our terms, late payment can lead to interest at 8% a year calculated daily, an administration fee of £295, and debt recovery costs including 15% of the total invoice, while late collection brings storage charges per lot per day and, after 20 days, possible abandonment. We do not accept card payments, so there is no card surcharge.

Is a deposit or a card required to register?

No deposit is taken at registration under our own sale terms, but do not treat that as a blanket rule: registration may require manual approval and identification, and requirements vary by bidding platform, so check the platform you are bidding on. An export VAT deposit does apply where you are buying to export, equal to the VAT due on the lot.

Can I reclaim the VAT on something I buy at auction?

It depends on your position, not only on the lot. Recovery requires that you are VAT registered, that the asset is for taxable business use, that the individual lot's VAT treatment allows it and that you hold valid VAT documentation. VAT at 20% applies to the hammer price unless the lot description states otherwise, and some lots are sold with no VAT on the hammer price. Where goods are sold under a VAT margin scheme, no separately recoverable VAT is shown on the hammer price, but VAT remains chargeable on our buyer-side services. Take your own VAT advice where it matters.

What does a winning bid cost, all in?

More than the hammer price. On an illustrative £6,000 van, adding an illustrative 15% buyer's premium of £900, an illustrative 3% internet surcharge of £180, VAT at 20% on all three of £1,416, £250 of transport and £600 of recommissioning gives about £9,346. Where the VAT is recoverable the real cost is around £7,930. The percentages that actually apply are stated on the lot's Additional Fees tab.

How much does it cost to collect what I have bought?

It depends on the asset, the distance and whether it can be driven. Email us the lot number and your postcode and we can obtain a no-obligation transport quotation while the auction is still running. Collection and transport remain your responsibility unless separately agreed. Collection is from the seller's own site, by prior appointment after cleared payment, and each lot carries a removal deadline in the sale terms.

How is VAT handled if I am buying to export?

The VAT is taken as a refundable deposit rather than waived at the point of sale, and it is refunded once you provide acceptable evidence of export within 28 days of invoice under our terms. If acceptable evidence is not provided the deposit is forfeited. VAT on the buyer's premium is not refundable in any circumstances, and the same applies to VAT on the internet surcharge. We are EORI registered, but that does not make us the exporter, the exporter of record or your customs agent, and export sales remain subject to the destination, asset type, sanctions, export controls and customs requirements.

Sources and references

1. VAT margin schemes · GOV.UK / HMRC, 2026 https://www.gov.uk/vat-margin-schemes
2. VAT rates on different goods and services · GOV.UK / HMRC, 2026 https://www.gov.uk/guidance/rates-of-vat-on-different-goods-and-services
3. Get an EORI number · GOV.UK, 2026 https://www.gov.uk/eori
4. Universal Auctions Group terms and conditions · Universal Auctions Group Ltd, 2026 https://www.universalauctionsgroup.com/terms-and-conditions

We run timed online, trade-only auctions of commercial vehicles, plant, machinery and business assets across the UK, with bidding open from anywhere. The buyer's premium and internet surcharge that apply to a lot are stated on its Additional Fees tab, and sellers receive 100% of the hammer price together with any applicable VAT.

View current commercial vehicle auctions

Universal Auctions Group · EORI registered and export-ready · no seller fees, UK-wide collection. This article is general information for trade buyers and sellers and is not financial, tax or legal advice.