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The internet means that people all over the world can bid in auctions anywhere but they usually pay an extra premium for doing that, even though extending bidding to the entire planet potentially raises the price realised which means the auction house earns more, too.
The best-known enabler of online bidding, thesaleroom.com, charges buyers 4.95pc+VAT which is 5.94pc for UK buyers. A competitor, invaluable.com, does not charge a fee to buyers making the auction house pay on a sliding scale.
Other online fees lie between those two extremes. Auction houses based outside the UK and the EU usually charge a fee for paying by card, typically 2.5pc. And that is in addition to the foreign transaction fee of 2.99pc which most banks charge for paying in any currency except pounds.
Sellers are charged less. Commission is typically 18pc including VAT. Though Sotheby’s has confirmed it will now charge 12pc (inc. VAT) from 20 May, raised to 14.4pc for items which fetch above its high estimate. It calls that extra a “success fee” though in fact it is a fee for it failing to get the high estimate right.
Some auction houses also charge a fee of around 1.8% (inc VAT) for insurance, and all of them charge the seller for illustrations in print or online catalogues especially those in a prominent position. That can range from £30 to as much as £600 including VAT. Fees for valuations and provenance (checking that you have the right to sell the object) may also be charged in some cases.
As dealers say, the hammer price is an amount the buyer does not pay and the seller does not receive.
The table below reveals the effect of charges on both buyers and sellers. It calculates the full actual cost to the buyer and then works out what sale price they would need to achieve to recover that spend.
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