Finance Commission

to Vat or Not to Vat that is the question?

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So here is my scenario - I work with a Car Sales company that has both Standard Vat Sales and Sales through the VAT Margin Scheme.

Various Finance companies pay a commission as a "thank you" back to the company.

Is this receipt a vatable item or not?  How do I account for this?  I am of the thought that the company I work for is Vat registered and therefore should be declaring vat on the commission.  Therefore moving forward we should be asking for the commission amount plus vat as this is no detriment to the commission issuer if they are vat registered and it is the net amount that we are interested in.

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chips_at_mattersey
By Les Howard
26th May 2016 18:03

Usually, commissions earned on the arrangement of credit agreements is VAT exempt.

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By tom123
26th May 2016 18:51

I wonder if it is possible that the finance company is not vat registered - and hence would be unable to 'recover' the vat you consider.

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