An estate agent (who is not an "authorised" mortgage broker) introduces customers to a mortgage broker in return for a proportion of the commision the broker receives from the bank or building society. The estate agent will typically do no more in terms of "preparatory" work than provide a piece of paper to the broker containing details of the name, address and finance required in relation to the customer.
Is the "fee" received by the estate agent from the broker exempt from VAT or liable at the standard rate?
John Day
Replies (3)
Please login or register to join the discussion.
Typically not....
Whether or not the estate agent is an "authorised broker" is not important. Whether he does preparatory work is.
The act of simply introducing 2 parties is not enough for the services to be exempt where the end product is a loan or mortgage. If the end product is any form of insurance then the introductory services may qualify for exemption.
A party who assists mortgage applicants to complete application forms and/or reviews the details to be put on those forms to make sure they are correct / suitable for the product is viewed by HMRC as having undertaken "work preparatory".
Hope that helps.
Regards
Paul Taylor
VATease - VAT Advice
re pension contribution
my accountancy firm received a sum of money from IFA in respect of share of commission on corporate pension contribution - I intend to account to my client for this amount by way of deduction from my fees to my client. Am I required to account for the VAT within the sum received given that the IFA will not pay any VAT on top?