Top UK auction house told to stop taking buyer’s premium for charity sales

Bonhams, the leading auction house, has clarified how it conducts its charity auctions after complaints that it was taking a “buyer’s premium” from a recent sale for a good cause.

The buyer’s premium is a charge in addition to hammer price that is retained by the auction house.

The international auctioneer said it had “waived all sellers’ and buyers’ fees” for charity auctions held this year so far, “as we will for the auctions coming up in the next few months”.

The statement from Bonhams came after complaints from participants in a recent charity auction that a buyer’s premium would go to the auction house rather than the charity.

John Brandler, an art dealer who has sold works to museums and galleries worldwide, said Bonhams had failed to clarify that it would receive a buyer’s premium at a sale it held last month for lots donated to the Teenage Cancer Trust.

The Bonhams catalogue entries for artworks at the June auction stated: “Kindly donated to Teenage Cancer Trust by the artist. All proceeds in support of Teenage Cancer Trust.”

Brandler said he had emailed the auctioneer, asking: “If you say ‘all proceeds’, does that mean that the buyer’s premium goes to [Teenage Cancer Trust] as well or are you not charging it?”

The auction house’s sale coordinator replied: “The full hammer price will be donated to the Teenage Cancer Trust. Buyer’s premium will be payable and 20% VAT.”

On its website, Bonhams states that, for most sale categories, the buyer’s premium ranges from 28% on the first £40,000 of the hammer price to 14.5% of the hammer price of amounts in excess of £4.5m.

Brandler said charities – and the public – would “think they are getting 100%” of the amount paid.

He added: “Bonhams advertised ‘all proceeds’ from the sale go to charity, then admitted [to] keeping a quarter of the money actually paid.”

The June auction, Anything But Ordinary, curated by British artists the Connor Brothers, included Chris Levine’s 2016 screenprint of Kate Moss, which sold for £2,304, including the buyer’s premium. Its catalogue entry stated: “All proceeds in support of Teenage Cancer Trust.”

The Canada-born, UK-based artist has donated works over the last three years that have raised millions of pounds. Asked about the Bonhams auction, he said: “It did state that ‘all proceeds’ go to charity … If you were bidding, and that’s what you read, you’d expect that. You might pay a bit more, but that’s OK, because it’s going to charity. So it’s a bit misleading.”

On Friday, Bonhams said: “We will donate the buyer’s premium to the Teenage Cancer Trust.”

Brandler, who was the underbidder on one of the lots, said he was “thrilled” that the charity would receive all the money paid for the charity lots. He added: “Will other salesrooms follow suit and be more [transparent] in their descriptions?”

Auctioneer Charles Hanson, an antiques expert on Flog It! and other TV shows, said: “If an auction house states that ‘all proceeds’ are going to a charity and it is billed as a charity auction, whatever the object makes on the fall of the gavel, the charity should receive in full what the buyer pays.”

Charlie Ross, a BBC Bargain Hunt presenter who stages up to 80 charity auctions a year, said: “I’ve always assumed that the buyer’s premium goes to the charity. So if somebody buys something, they pay £50 or £50,000, or whatever amount, and the whole proceeds go to the charity.”

Ross added that auction houses are providing a platform, offering their premises and producing a catalogue, which would incur costs: “But, if they’re selling things for £20,000, the buyer’s premium might be about £5,000. It’s what you and I might call ‘a nice little earner’.”

The London auction house Phillips staged a charity sale in March with works sold “to benefit Whitechapel Gallery’s education and public programmes”. A note stated: “Estimates do not include buyer’s premium or other applicable charges and taxes.”

Asked whether those charges went to Phillips or the Whitechapel, the auction house said: “Phillips donates a portion of the buyer’s premium to further support Whitechapel Gallery’s educational and public initiatives.”

The Teenage Cancer Trust said that it is “incredibly grateful” for the fundraising efforts at Bonhams: “The £60,000 raised will make a huge difference to the lives of teenagers and young people living with cancer.”

The Connor Brothers praised Bonhams for spending “a huge amount of resources” on the event and previous collaborations that have raised hundreds of thousands of pounds.

A spokesperson for BonhamsThe auctioneer said: “Bonhams was more than happy to waive all charges for the evening event and the subsequent sale so there was zero cost for the charity.”