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VAT Flat Rate Scheme

VAT flat Rate Scheme and lettings of a property

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So, I have a client who includes his monthly VAT lettings invoices as part of his quarterly VAT returns.

He managed the property himself and accordingly invoiced his tenants for the rents.

He has now changed this and appointed an agent who is charging my client a quarterly fee payable at the beginning of what looks like each VAT quarter.

 So my question is in the absence of paperwork that my client is unable to get from the agent, does he invoice the management agent for amounts received net of their charges: or for the gross amount of rents due and then create a self billing invoice internally for the agent charges for which he would obviously charge as expenses in his accounts..

What happens if there are repairs and renewals charged by the management agent along the way as there will surely be?


Replies (4)

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By lionofludesch
15th Jan 2020 12:09

So, he needs to include the gross rents.

So, if he pays for repairs he still needs to include the gross rents.

So, he needs to be reviewing whether the flat rate is still for him.

Thanks (3)
Replying to lionofludesch:
By davidbarry
16th Jan 2020 10:26

yes. I agree with you. The rental income would also be wrong as it would be based on a net position which cant be right. Thank you fore your reply.

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By Les Howard
15th Jan 2020 14:08

Since he will not be able to recover VAT on repairs and maintenance he should consider whether the FRS will work for him.

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Replying to leshoward:
By davidbarry
16th Jan 2020 10:27

yes. We have discussed this at length. Thank you for your response.
it is appreciated.

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