sel employed VAT on commission

[zathras]

I am a self employed teacher and I am not VAT registered. One of the agencies that provides jobs for me wants now to charge VAT on the commission I pay them because they have become liable for VAT I can't pass this charge on to my clients. Can they do this because it means that I get 17.5% less on my fee?
Any ideas?

This sounds illegal to me.

Now it depends on how you supply services to the agency via a limited company or not.

It is illegal to charge a worker a fee for finding a job. The exceptions to this are the Entertainment trades (actress, actor etc), there may be others but I do not think teaching is one of then, and if you supply via a limited company and only if you have opted out of the regulations. There is no opt out of the regulations if you do not use an intermediary.

If you wanted to complain you will need to speak to the DTI or whatever it is called. They would also give you the most accurate information, me not being a lawyer and all that.

Now the VAT issue. Provision of staff does not attract VAT. Only the agency services do. Also it costs them zilch, nadda, nothing. If they collect VAT from their client, then that is passed on to HMRC. As far as I can tell your services are not even VATable. Again speak to HMRC, they will give you the rules, but from here this does not sound correct.

[Sockpuppet]

If you are a teacher unless you are doing home work to private individuals why not just become vat registered and then pass on the cost.

Schools are vat registered.

[zathras]

If you are a teacher unless you are doing home work to private individuals why not just become vat registered and then pass on the cost.

Schools are vat registered.

This VAT issue stinks and sounds as dodgy as a 9 bob note!

If they (the agency) are now liable for VAT then the either should have been collecting it from their client, or they have been collecting it and not paying to HMRC.

If the former then it is their problem. They need to get the money off their client, not the worker. If the latter then tough! they had a hand in the cookie jar and got caught.

The charging commission also seems dodgy but the OP has not given enough information. Do they work via a Limited Company, what exactly are the services provided. Classroom teaching, at their house one-to-one?

[Old Greg]

Emma

Are you an union member? If so, they may be able to help you.

[emma tate]

self employed VAT commission

Thank you all for your comments and advice. It has been fantastically helpful and I really appreciate the time that evrybody has taken.
Cheers.

Emma