Franchise royalties

Franchise royalties

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Hi

Just wanted to check please - are franchise royalties (such as servicemaster / merry maids et al) subject to vat?

Many thanks

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By Sunshine Onerenidi
12th Aug 2011 11:32

Is it a supply...

... of goods or services made in the UK by a taxable person in the course of furtherance of their business?

It's not goods and anything that isn't goods but is done for a consideration is a service.

Are royalties a consideration?  I think they are.

So absent an exemption, it looks VATable to me.  Why do you think it might not be?

Regards.

Sunshine Onerenidi

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By jane
12th Aug 2011 15:10

franchise & vat

Wasn't sure whether it was VAT or not & to be honest find the guidelines on HMRC such a tome to wade through I knew that someone on this site would know just like that!

I was asking as this is the first time I have worked for a person who has a franchise - my other customers are farmers in the main!

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