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Does anyone have any guidance

VAT charged by a Modelling Agency

My Client has a modelling agency(MA) and has been invoicing their client's for the services of various models plus the MA's fees plus VAT on all of it. The MA receive an invoice from the model (who is not VAT registered). MA then pay the model once they have received payment from their client.

We have spoken to HMRC four times in the last 2 days, each time a different answer is given and no conclusive correct way of doing things. We have logged a call back from their technical team and an inspector to confirm the correct way of doing it. Below is what we have been told so far.

1. They say VAT Notice 700 sec 23.1.1 can be interpreted as the agent is providing a service to the client and therefore VAT is charged on all of it, which includes the models cost and commission of MA.

2. Full VAT is due where MA charges to client and no invoice from the model to agency. However, only VAT on commission where MA is charging commission plus model fee to client but the model has supplied an invoice to MA.

3.VAT Notice 700 sec 22.3 only the commission MA charge has VAT charged on it as it is "the supply of your own services to your principal, for which you will charge a fee or commission - the normal VAT rules apply to your services as an agent".

Any guidance on what is the correct procedure and where to look would be appreciated.

Thanks VP







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24th Feb 2018 13:32

Presumably the model has no direct legal relationship with the client, so the Agency is providing services as a principal?
Do you have written contracts?
There is some additional guidance here:

Thanks (1)
to leshoward
26th Feb 2018 10:35

The model agrees and signs the standard terms and conditions of the MA. The model has no direct relationship with the end client

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