Home Care Franchise MSF VAT

Home Care Franchise MSF VAT

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I run a home care franchise business and my franchisor charges me VAT on the mothly management service fee (percentage related to turnover) despite home care being exempt for VAT. Is it correct that they should?

Replies (7)

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By FactChecker
20th May 2024 18:58

If you haven't already got one you need to appoint an accountant for your business ... or, if you have one, get them to give you the answer (and explanation) as they'll know all the ins and outs of your business.

At a guess, from what you've said, you've confused two unrelated things:
1. whether or not the franchisor should charge VAT;
2. whether or not you (or rather your business) is 'VAT exempt' AND what that means.

1. Assuming that the franchisor is VAT registered, it is generally likely that what they're supplying (a service) is subject to VAT - irrespective of to whom they are making that supply (assuming their client is in the UK and is a business);
2. Too much to explain here the most basic aspects that you appear not to understand - but even if your business is VAT exempt that doesn't mean that you can buy things (on which everyone else has to pay VAT) without paying the VAT on invoices for those things being supplied to you.
IF exemption applies it may not be a blanket application, but anyway it refers to the goods and services offered by your business (the care operator) as being exempt from you having to charge VAT to your clients.

Thanks (4)
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By Paul Crowley
20th May 2024 19:08

Franchisor is not supplying home care to you. He is supplying business services, and those are subject to VAT.

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Replying to Paul Crowley:
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By FactChecker
20th May 2024 19:36

Much more concise!

Thanks (5)
Replying to Paul Crowley:
RLI
By lionofludesch
20th May 2024 21:38

Clsssic Who is supplying what to whom?

Thanks (2)
VAT
By Jason Croke
21st May 2024 07:34

I like the classics!

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Replying to Jason Croke:
RLI
By lionofludesch
21st May 2024 08:10

Jason Croke wrote:

I like the classics!

That's 93.7% of them.

Made me chuckle when Factchecker said it's too complicated and then Paul nailed it in a couple of sentences.

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Replying to lionofludesch:
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By FactChecker
21st May 2024 11:40

To be marginally fair (adopts defensive tone) I never said it was 'complicated', just that the OP seemed totally confused over the fundamentals ... and so I set out to explain things for their benefit.
Admittedly this took me 16 full lines vs Paul's 1.5 lines to come to the same conclusion ... hence my plaudit to his concision!
[There you go ... another 6 lines clogging up the Aweb storage devices]. :=)

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