Q: My client is an art gallery selling artwork on behalf of an artist. The gallery will retain 50% of the sale proceeds. Should the gallery charge VAT on this 50% retained?

A: The first point to establish here is whether the gallery is acting as a ‘disclosed’ or ‘undisclosed’ agent (ie, acting in their own name’).

A disclosed agent is one where the consumer, who will be buying the artwork, is aware that the artwork is being sold by a third party (ie, the artist).