Service charge vat to end user

Service charge vat to end user

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Hopefully this will be a simple question to answer.  Work is completed by a contractor in a residential lettings area, they produce a vat invoice to the letting agent who is also vat registered.  What cost will be passed on to the residents within the service charge, the net amount or the gross including vat?

I thank you in advance for any replies

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By jndavs
25th Sep 2014 13:36

Agency

It appears from your description that the letting agent is acting merely as an agent for the residents. As such he will not be entitled to reclaim the vat.

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By Tandle Accountancy
25th Sep 2014 13:41

Whilst the agent is VAT registered, I suspect that there is a management company in place for the running of the residential service charge and this is who the contractor will be billing, not the agent (with the agent acting on the management companies behalf processing the invoices)
Therefore the residents will pay the Gross amount not the net

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