Is VAT on property mgmnt fee included in % taken?

If i am charged 11% property mgmt fee, should that not include the vat the property management takes

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House owner, not a company, paying property mgmt co. to manage a small residential property in UK. Contract is I pay 11% per month fee. Shouldn't VAT charged by property co. be included in that 11%? Why are they charging 11% +VAT?

Replies (18)

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DougScott
By Dougscott
23rd Apr 2024 23:30

Property management fees are always stated as a percentage of rent PLUS VAT. You will have signed a contract. So 11% + VAT.

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By David Ex
23rd Apr 2024 23:30

Suggest you look at the agreement you entered into which will specify the charges.

Nobody here knows the details of your contract.

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RLI
By lionofludesch
24th Apr 2024 07:35

How would we know?

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Replying to lionofludesch:
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By Leywood
24th Apr 2024 08:36

Physic powers not working today Lion?

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Replying to Leywood:
RLI
By lionofludesch
24th Apr 2024 09:06

Leywood wrote:

Physic powers not working today Lion?

I've always loved physics.

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Replying to lionofludesch:
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By Leywood
24th Apr 2024 14:36

Haha.
Oops. Predictive text taking over my phone!

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Replying to Leywood:
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By FactChecker
24th Apr 2024 15:40

... which has also obviously not had the psychic module installed.

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VAT
By Jason Croke
24th Apr 2024 08:38

It's a contractual (legal) matter, rather than an Accounting one.

The contract will likely state the fee is 11% plus VAT, if it is silent on VAT then maybe potential to raise a dispute, else, you signed the contract and agreed to the terms.

I'd have thought any decent property mgmt company would be VAT registered.

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By zebaa
24th Apr 2024 09:15

OP, are you saying that the rent for a domestic house is taxed ( as vat ) by the landlords agent ? You need to be clear upon what, vat is being charged.

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Replying to zebaa:
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By Bobbo
24th Apr 2024 09:45

To be fair, I think on this occasion the OP was actually very clear in stating that the VAT is being charged on the management fee charged by the managing agents to landlord.

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Replying to Bobbo:
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By zebaa
24th Apr 2024 10:05

What was not clear – to my mind – was what the management fee included. For example, maintenance costs incurred through non vat registered traders. Having seen some of the insider tricks landlords agents pull I regard the whole lot of them with a jaundiced eye. Again, another example; ‘preferred’ traders ( electricians, plumber & builders etc. ) where the traders are encouraged to add, say 10%, to the total cost, with the 10% quietly going to the landlords agent as an arrangement fee.

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Replying to zebaa:
paddle steamer
By DJKL
24th Apr 2024 10:51

Thanks, glad to know we are all viewed through your jaundiced eye.

We certainly never received any kickbacks(or if we did they body swerved me), perhaps we missed a trick .

Thank goodness these days we now only do a little property consultancy and a little commercial agency , the only property management I now do is in house for my other employer re our own properties.

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Replying to DJKL:
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By zebaa
24th Apr 2024 14:43

I’d be happy to exclude DJKL from my scepticism. Perhaps because, with property, large sums of money can be made, it can attract unethical behaviour. As another example, I knew of an estate agency who would low value property of aged vulnerable people. This would then allow a partner to offer a quick sale and after a swift refurbishment put it back on the market for a considerable profit.

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Replying to DJKL:
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By FactChecker
24th Apr 2024 16:11

You can blame that Only Fools and Horses episode ...
... the one where Del discovers the pub manager has been quoted £600 to redecorate - so offers to do it "for only £1000"!
When asked why that offer should be entertained, he patiently explains that he'll sub-contract to the other decorator "which leaves £250 each for you and for me"!

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By JCresswellTax
24th Apr 2024 09:46

'not a company' oooh thats too tough for me now. As being a company makes all the difference sometimes.

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Replying to JCresswellTax:
RLI
By lionofludesch
24th Apr 2024 11:59

JCresswellTax wrote:

'not a company' oooh thats too tough for me now. As being a company makes all the difference sometimes.

To the VAT charge?

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Replying to lionofludesch:
Stepurhan
By stepurhan
24th Apr 2024 12:19

I suspect some sarcasm is at play here.

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Replying to JCresswellTax:
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By Krashniker
27th Apr 2024 20:37

Thank you for the sarcasm, yet, as i am not an accountant, and i am trying to understand my parents affairs after my (accountant) father passed away recently, i thought it was better to clarify all details ie the rental is not owned by a business, but just a private property. Being that I am not an accountant and I don't even live in UK, so I am not familiar with the rules. Just trying to make sure that my mother is paying the right amount not having been able to get hold of the original contract at the time I posted.
Thank you for the answers. (And just to clarify, I have so far managed to get the latest update to terms stating 11% +VAT, but still not an original contract!)

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