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Is there vat on commissions?

Car body shop

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A carbody shop has a contract with an insurer whereby he is their preferred supplier. In exchange for this, the insurer witholds a commission from him for each sale. Is this subject to VAT, I suspect not becuase it is commission to an insurer but the end supply is of course vatable?

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By Les Howard
22nd May 2020 14:02

I think it is vatable.
An insurance commission is exempt only because the intermediary introduces a person to the insurer. I think your example is the other way around.

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By frankfx
22nd May 2020 16:16

Does insurance company provide invoice for their costs to you.?

No doubt they settle invoices net of their costs.

You need to be careful that unpaid balances on invoices are not left on trade debtors ledger......then written off.

Perhaps with vat bad relief inadvertently claimed.

The insurance company remittance should advice should be studied.

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