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VAT - COMMISION ON SALES OF GOODS

VAT ON COMMISION

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Hi,

One of my clients has agreed a deal to source some goods for another business. 

My client who is VAT registered is going to be sourcing the goods from the EU(so no VAT) and then providing  the other business who is NOT VAT registered the goods

He will use his own money getting the goods and then the client will pay him the cost amount plus 15% commision fee for sourcing the goods 

My question is does he pay VAT on the 15% commission? or does he have to treat it as a normal VAT sale?

 

Replies (11)

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By Ben McLintock
29th Jun 2020 01:42

Who is the importer i.e. who owns the goods at point of import? Any what is the nature of the goods?

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Replying to Ben McLintock:
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By Rahail95
29th Jun 2020 12:28

Quote:

Who is the importer i.e. who owns the goods at point of import? Any what is the nature of the goods?

The goods are fitness supplements, my client will be the importer and once goods have arrived they will given to the business he acting for.
there is no contract in place at the moment but they working through a verbal agreement.

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Scalloway Castle
By scalloway
29th Jun 2020 08:10

If your client is a disclosed agent then VAT is only payable on the commission.

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By Rahail95
29th Jun 2020 11:55

what is the criteria of a disclosed agent?

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Replying to Rahail95:
RLI
By lionofludesch
29th Jun 2020 12:06

Quote:

what is the criteria of a disclosed agent?

Basically, the supplier knows you're acting for the customer, not for yourself.

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By Rahail95
29th Jun 2020 12:25

Thanks, will my client need some sort of agreement or acknowledgement from the supplier ?

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Replying to lionofludesch:
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By Rahail95
29th Jun 2020 12:29

Quote:

Quote:

what is the criteria of a disclosed agent?

Basically, the supplier knows you're acting for the customer, not for yourself.

Thanks, will my client need some sort of agreement or acknowledgement from the supplier ?

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Replying to Rahail95:
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By Ben McLintock
29th Jun 2020 13:15

I don't think your client is the agent here - sounds very much like he's the principal sourcing the goods and making an onward supply. Without any other info, I'm leaning towards the full amount being a standard rated supply.

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By paul.benny
29th Jun 2020 08:44

In the OP, you say that the client pays for the goods themself. That's strongly indicative of taking title which would make the entire sale standard-rated.

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Replying to paul.benny:
RLI
By lionofludesch
29th Jun 2020 09:29

Agree.

You'll need to look at the contracts with care.

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By tom123
29th Jun 2020 12:19

I always assume there aren't any contracts to look at on this kind of thread..

(and of course the OP is stuck with a kind of post rationalisation thing)

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