VAT - Villa Rental Commission

VAT - Villa Rental Commission

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UK based agent receives commission in return for finding a customer and handling booking etc. for typically EC based properties/property owners.
Am I right in thinking that since the place of supply of the service is UK based, that the commission is subject to VAT ? Which should be billed to the property owner (though in reality actually swallowed in the agreed 10% or 20% or whatever the commission rate is) ?

The agent does not provide any other services so I am sure that this does not get clawed into the dreaded TOM's.

Any travel/VAT experts out there who would care to comment ?

Bob

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By barrydovey
28th Nov 2006 16:48

commission may not attract vat
commission does not usually count for vat e g introducer services are vat exempt

are these people however introducing or managing?

depends on the srevices they actually supply

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By AnonymousUser
29th Nov 2006 17:31

none the wiser
Thanks for comments guys, but I am none the wiser.
Does the VAT office still do informal advice over the phone ?

Just to make it worse, business now tells me that they plan to buy some villa accomodation on a net basis and add a mark up before selling to UK clients. Seems wrong that they would need to add VAT to full price since the client could buy direct from villa owner and pay no VAT, but I cant see any other way.

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By User deleted
29th Nov 2006 21:20

VAT Notice 741 explains the Place of Supply Rules which are most likely to be relevant to the question. The precise nature of the services will determine how / where [ie,. which country] VAT will be applicable.

This VAT booklet (in pdf form) can be downloaded from the HMRC website.

Advice by telephone from HMRC re: VAT matters such as this can be obtained on the following number :-

0845 010 9000

This helpline will also be able to tell which address to write to get a written ruling which, in cases of doubt, is strongly recommended.

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By nick farrow
30th Nov 2006 09:25

land & property place of supply
you may find that for real estate agent services the place of supply is where the land & property is situated so although the uk based agent supplies will be outside the scope of UK VAT the agent will have an obligation to register in the country where the property is situated - in practice I have found this not easy where the client has no physical presence or establishment - he is supposed to appoint a local VAT agent I believe

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By AnonymousUser
01st Dec 2006 12:21

HM Customs answer
VAT ofice tells me that this is an intermediary service outside the scope of UK VAT.
Probable need to regsiter in each of the EC locations where the villas are.
A complete nightmare.
Thanks all for various comments.

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