sel employed VAT on commission

[emma tate]

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?

[elainec100]

Because they are making a taxable supply that they will have to charge vat on.

However what did you original contract with them say – if it was a fee at x% then that’s what you should pay and they will have to ‘absorb’ the vat.

[Ruprect]

Because they are making a taxable supply that they will have to charge vat on.

However what did you original contract with them say – if it was a fee at x% then that’s what you should pay and they will have to ‘absorb’ the vat.

Unless it expilicitly states "including VAT" then I think that what elaine has said is b*11ocks I'm afraid.

[Bluebird]

Unless it expilicitly states "including VAT" then I think that what elaine has said is b*11ocks I'm afraid.

who's elaine ?

[Ruprect]

who's elaine ?

elainec100 - the poster I quoted. Is this a trick question?

[Old Greg]

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?

Why are you paying them commission? Aren't they charging the client instead?

[emma tate]

self employed VAT commission

Re being charged charged VAT on commission - thanks for the replies. Just one more thing - isn't there always? - My contract makes no mention of VAT on the commission I pay to the agency on the full fee I receive from the client. I have actually paid VAT on the last few commissions in good faith and because I didn't know any better - does this constitute an agreement that I am liable for the VAT? Can I reclaim what I've already paid?

[Old Greg]

Re being charged charged VAT on commission - thanks for the replies. Just one more thing - isn't there always? - My contract makes no mention of VAT on the commission I pay to the agency on the full fee I receive from the client. I have actually paid VAT on the last few commissions in good faith and because I didn't know any better - does this constitute an agreement that I am liable for the VAT? Can I reclaim what I've already paid?

This is odd - maybe your agency works differently from mine.

I don't pay 'commission on the fee' from my agency.

I sell my services to the agency and they sell it onto the end-client. The agency takes a percentage from what they receive from the end client.

The agency charge VAT to the client and presumably pays it onto HMRC. The end client pays the VAT but claims it back from VAT. I don't see why this VAT should ever be paid by you.

Have I got the wrong end of the stick? Can anyone else advise?

[Bigbird]

Emma the agency are breaking the law. THIS is the DTI guidance page - the very first paragraph states

Can an agency charge me for finding me work or for registering with them?
A fundamental principle of the Employment Agencies Act is that workers cannot be charged for work finding services. The exceptions to this are the entertainment and modelling sectors. Please telephone the enquiry line on 0845 955 5105 if you have a query relating to this area.

They can be "struck off" from acting as an agency if the break this rule, and not allowed to trade. I suggest you speak to someone senior there straight away and ask them to refund every penny of "comission" they have charged you in the time you have worked for them.

[Old Greg]

Emma the agency are breaking the law. THIS is the DTI guidance page - the very first paragraph states



They can be "struck off" from acting as an agency if the break this rule, and not allowed to trade. I suggest you speak to someone senior there straight away and ask them to refund every penny of "comission" they have charged you in the time you have worked for them.

Make sure you've got your details right. Are they charging you commission, or do they take a % off the end-client and now they are looking to increase that % because of VAT?