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Vat exempt commission

how should be vat calculated on vat exempt services with no extra cost

Education is VAT exempt, I believe worldwide.

Therefore if I were a school of languages for example and I charge my customers 100£ for a course, I will have not VAT on it.

 

Now, let's say I engage an agent, so another company that will sell my course for the same price, but I will give them 10% commission. Is the agent liable for VAT on these 10%? Or should the same VAT of the main service/good be applied(Vat exempt)?

As a school I will never make a distinction between studying and selling my programme and the agent neither, in fact the agent will sale at the same exact price. I have been looking for this information online but I can't find any formal explanation.

Could reverse Vat rule be applied on the commission so that the school will play for it, since the school exempt?

 

 

 

 

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02nd Dec 2018 10:43

1. Your initial belief is incorrect, see VAT notice 701/30

https://www.gov.uk/guidance/vat-on-education-and-vocational-training-not...

2. Agency rules are complicated See VAT notice 700 section 22 onwards

3. Talk to your accountant before you make expensive mistakes, not afterwards....

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02nd Dec 2018 17:51

A few misunderstandings in your post which will require a patient contributor with too much time on their hands to answer in writing to the satisfaction of a layperson.

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02nd Dec 2018 19:03

Everything above is correct.
Education is exempt, where supplied by a non-profit, unless the education is TEFL. Whether exemption will benefit you depends on whether your customers are in business or private persons.
And, yes, in principle VAT is due on commission.

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to leshoward
02nd Dec 2018 19:44

leshoward wrote:

where supplied by a non-profit, ./p>

...by an eligible body...

'non-profit' is an ambiguous and possibly misleading term and I will not rest until its use is wiped from the face of the earth. Though perhaps I should get out more first...

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to leshoward
02nd Dec 2018 21:22

leshoward wrote:

Everything above is correct.

If I may say so, Les, that's a very sweeping statement.

Education is a very complex area. People are frequently caught out by failing to read the small print.

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