Indicator VAT Memo 2024-2025

Part1:ScopeofVAT

Part2:Outputtax

Part3:Inputtax

Part4:Compliance

Part5:Enforcement

Part6:Simplifiedaccountingschemes

Part7:Particularactivities

58000Second-handgoodsandcollectibles

60000Goldtransactions

61200E-business

63000Agents

65100Thetravelindustry

67000Barristers

68100Publicbodies

70000Charities

72000Clubsandassociations

73500Pensionfunds

Part8:Businesssituations

75000Commencingandceasingabusiness

77000VATgroups

Part9:Cross-bordertransactions

80000NorthernIreland:goodswithintheEU

83000GB/NI:goodsoutsidetheUK/EU

85000Internationalservices

87000Cross-borderVAT

90000Appendix

91000ECDirective

91500Tableofcases Index

Generalinformation

SECTION3

Blockedinputtax

Inputtaxisnotdeductible(andisknownasblockedinputtax)inrespectofthetypesof supplyinthetablebelow,thepresumptionbeingthatmostofthesesupplieswillbeputto non-businessuse.Alternatively,VATisonlycalculatedontheprofitmargin.

Theonwardsaleoftheseitems,whereinputtaxhasbeenblockedonacquisition,is exempt.

Summary

Thefollowingtypesofsupplyarediscussedintheparagrpahsindicated:

Provisionofaccommodationtoadirector

Certaingoodsinstalledindwellings

Servicesandgoodsacquiredbytouroperators

Goodsandservicesacquiredunderamarginscheme

reg6

reg12

reg4(2)

A.Motorcars-acquisitionandleasing

Subjecttotheexceptionslistedat¶20915,inputtaxdeductionontheacquisitionorleasing ofcarsisveryrestricted.Itisofcoursevitaltoknowwhetheraparticularvehicleisacar, becauseinputtaxcanbefullydeductedonothertypesofvehicle

1.Scope

Forthesepurposes,amotorcarisdefinedasavehiclewhich: –isnormallyusedonpublicroadsandhasthreeormorewheels; –isconstructedoradaptedmainlytocarrypassengers;and –hasroofedaccommodationbehindthedriver’sseat,whichisfitted,orcouldbefitted, withsidewindows.

However,thefollowingvehiclesareexcludedfrombeingacar: –ambulances,caravans,prisonvansandothervehicles(suchashearses)constructedfor aspecificpurposethatdoesnotincludethecarriageofpeople; –thosewithspaceforonlythedriver; –vehicleswithcapacityfortwelveormorepassengers; –thoseweighingatleast3tonneswhenunladen;and –vehiclesthatcancarryapayloadofatleast1tonne.

MEMOPOINTS

1.Inaddition,vehiclesthatwouldotherwisepassthe12-passengertestbutwhich havebeenadaptedforwheelchairuserswillnotfailthetestsolelybecauseofthatadaptation.

2.Fordoublecabpick-ups,whicharenotcarsifthepayloadisatleast1tonne,theadditionofa hardtopwilldecreasetherequiredpayloadby45kg

Car-derivedvans

Thesevehicleshavethefunctionalityofavan,becausetherearseatsandseatbeltsare removed,thefootwelliscoveredover,andthesidewindowsaremadeopaque

Wheresuchvehiclesarenotdesignedtocarrypassengers,itispossibletotreatthemlike vansforVATpurposes,iftheysatisfyallofthefollowingcriteria:

Vehicleproperty Criteria

Loadarea

Highlyunsuitableforpassengers Functionalityofacommercialvan

Seatbeltmountings Completelyremovedordisabledandboltholesweldeduporbonded shearboltsfitted

Seatmountings

Rearfootwell Permanentfixedcoverweldedorfixedontop Windows Madecompletelyandpermanentlyopaque Mechanismforloweringandraisingdisabledorremoved

Combinationvans

Thesehaveseats(permanentorfolding)behindthedriver’sseatandareusuallyclassed asamotorcar,exceptwhen:

–theseatbeltsandseatmountinghavebeencompletelyremovedordisabled; –theloadareaisofsuchasizethatthecarriageofgoodsisthepredominantuseofthe vehicle;or

–thepayloadcapacity(whichwillbereducedbyanyseating)isstillinexcessof1tonne

Motorcaravans

Motorcaravansarenotcars,providedthatallofthefollowingcharacteristicsarepresent: –permanentlyinstalledsinkandcooker; –atleastonebedofalengthof1.82mormore; –permanentlyinstalledfreshwatertankwithaminimumcapacityof10litres;and –seatingaroundamealtable.

Conversions

Thepurchaseofacartoconvertitintoanothervehiclegivesrisetodeductibleinputtaxif conversionwasintendedfromthestart.Conversionfollowingachangeofintentiondoes notgiverisetoanyretrospectiverighttoinputtaxdeduction. Whereacommercialvehicleisconvertedintoacar,thereisaself-supply(¶15665+)bythe owner,whichmeansoutputtaxmustbechargedtobalancetheinputtaxalready recovered.

2.Carswhereinputtaxisdeductible Inputtaxisnotblockedonthefollowingtypesofqualifyingcar: –stockforresale; –carsacquiredforthepurposeofacar-relatedtrade;and –carsacquiredwhollyforbusinessuseandnotintendedtobemadeavailableforprivate use

Aqualifyingcarisonethathasneverenteredfinalconsumption.Inpractice,thismeans that:

–thecarhasneverbeenpurchasedbyanon-taxableperson;or –noinputtaxhaseverbeenblockedonapurchasebyataxableperson.

Whereasnewcarsobviouslyfitthesecriteria,carssoldbyleasingcompaniesarealso likelytobequalifying

CHAPTER1 Registration

SECTION1Overview 25700

Summaryofsituationsrequiring registration........................................25700 Comparisonofthemainregistrations 25705 Consequences 25710 Theregister 25715

SECTION2Taxablepersons 25900

AWhoisataxableperson? 25900 Person 25905 Otherpersonsactingasataxable person..............................................25910 Employees 25915 Suspensionofactivity 25920

BBusinesssplitting 25950

1Generalprinciples 25950

aHMRCcounteraction 25970

bWhendoesbusinesssplitting occur? 25995

2HMRCdirections 26035 Consequences 26040 Supplementarydirections....................26045

SECTION3PersonsmakingUK supplies 26200

AWhocanregister? 26230

1Taxablesupplies..............................26260

2Exemptionfromregistration 26290 aZero-ratedsupplies.......................26310 bFallingturnover.............................26335

3Howmanyregistrationsare required?.........................................26380

BCompulsoryregistration 26410

1Non-establishedtaxablepersons.....26440 Registrationprocess 26445

2Othertaxablepersons 26475

aWhatiscomparedtothethreshold?. .26495

bLookingback 26525

cLookingforward 26550

dBothtestscouldapply 26570

3Failingtoregister 26600

CVoluntaryregistration......................26630

1Intendingtaxabletrader 26660

2Effectivedate...................................26700 Retrospectiveregistration 26705

3TradernotmakingtaxableUK supplies 26735

DHowtoregister...............................26765 Detailsoftheform 26770 Certificateofregistration 26775 VATnumber......................................26780

Immediateconsequences...................26785 Changesincircumstances 26790

ECeasingtoberegistered 26825 Summary 26830

Compulsoryderegistration...................26835

Voluntaryderegistration 26840

Whenderegistrationbecomeseffective26845

FSpecialsituations 26875

1Partnerships 26905

Whoisthetaxableperson? 26910

Scottishpartnerships 26915

Applyingforregistration 26920 Notificationofchanges.......................26925

2Divisionalregistration.......................26955

Eligibility 26960 Commencing 26965 Continuing.........................................26970 Ceasing 26975

3Jointownersofland 27005

B.Businesssplitting

1.Generalprinciples

HMRChaspowerstointerveneifitbelievesthatasinglebusinesshasbeensplitintotwo ormorelegallyindependentpartstoavoidoneorbothbeingliabletoregisterforVAT.This issometimesknownas“disaggregation”

a.HMRCcounteraction

Assessments

HMRCmayissueassessmentsbackdatedtothedatewhenthebusinesswassplit,if: –thesuppliesexceedtheregistrationthresholdandareactuallybeingmadeby onlyoneofthebusinesses;or –theactualsuppliesmadebyoneormoreofthebusinessesexceedtheregistration threshold.

Thishasaretrospectiveeffect(¶26600)andlateregistrationassessmentscangobackas faras20years(¶36175).

Notices

HMRCmayalsoissueanoticemakingadirection(¶26035)totreattheseparatepartsasa singleentityforVATpurposes.Thiscannotbebackdated,andmayonlybeissuedwhen thesplitisconsideredbyHMRCtobeartificial.

Beforemakingadirectionnaminganyperson,thefollowingcriteriamustbesatisfied: –thepersonhasmadeorismakingtaxablesupplies; –theactivitiesperformedbytheperson,andwhichgiverisetothetaxablesupplies, formpartofalargerbusinessfunctionwithotheractivitiesbeingcarriedonby anotherpersonorpersons;and –ifallthetaxablesuppliesofthatbusinessfunctionweretakenintoaccount,a personcarryingonthatbusinesswouldbeliabletoberegistered.

EXAMPLEMrsBownsstablesfromwhichsheprovidesfullliveryservices.Herannualturnoveris £100,000andshewouldthereforeberequiredtoregisterforVAT.

However,ifthebusinesswasstructuredsuchthatMrsBonlyprovidedthestabling(withanannual turnoverof£55,000)andMrBprovidedthefeed,beddingandotherfacilities(withanannual turnoverof£45,000),thetwobusinesseswould,intheabsenceofadirection,notneedtobe registeredforVAT.

Intheseparticularcircumstances,itislikelythatHMRCwouldissueadirectiontotreatthetwo entitiesasoneforVATpurposes.

b.Whendoesbusinesssplittingoccur?

Althoughtherearenodefinitiveteststoestablishwhetherabusinesshasbeenartificially split,HMRCisrequiredbystatutetoconsiderthefinancial,economicandorganisational linksbetweenthepersons,including,forexample: –theexistenceorotherwiseofnormal,commercial,arm’slengthrelationships; –theapportionmentofoverheadcosts; –addressingofinvoices; –meansofadvertising; –segregationorotherwiseoftakings;and –theexistenceorotherwiseofseparatebankaccounts,accountingrecordsand financialstatements.

MEMOPOINTS 1.Publicperceptionandthetreatmentofthebusinessfordirecttaxpurposes areunlikelytobeofsignificanceforHMRC(althoughtheymaybefactorswhich,when consideredwithothers,areindicativeonewayortheother).

2.Inrelationtoholidayaccommodation,seealso¶53510.

EXAMPLE

1.Afishandchipshopandtwolaunderettebusinesseswereallegedlyrunasthreeseparate businesses,withtworunbythehusbandandtheotherbyhiswife.

However,theywereheldtobeonebusinessforVATpurposeswiththehusbandasthesole proprietor,largelyonthebasisthatthevarioustradingpremiseswereinhisnamealone,aswasthe bankaccount.Alltheinvoicesforsuppliestothebusinesseswereaddressedtohim.Thetribunal wassatisfiedthatatalltimesthe“controllingmind”ofthebusinesswasthatofthehusband.RSSahota [1997](VTD14986)

2.Itwasclaimedthatakebabandpizzatake-awayoutletwasrunastwoseparatebusinesses, withanarrangementthatthepizzaoutlettradedforonehalfoftheweek,andthekebaboutletfor theother.Eachbusinessemployeditsownstaff(apartfromonesharedemployee).However,on thefactsofthisparticularcase,andintheabsenceofawrittenagreementbetweentheparties,the activitieswereheldtoconstituteonebusiness,asthepartiesdidnotadequatelydemonstratethat therewasanormalcommercialrelationshipbetweenthem.Forexample: –therewasnoseparatechargefromthefreeholdertoeachbusinessforoverheads; –bothpartieswerecoveredbyonepublicliabilitynotice; –allpurchasesofgoodsweremadebyoneparty;and –thebusinesswaspresentedtothepublicasone,bothpartiesusingthesametradingnameand menus.L&AEleftheriou(t/aPicnicKebabHouse)[2000](VTD16659)

Extensiontoactivity

Generally,whereanexistingbusinessisextended,thenewactivitywillberegardedas beingpartoftheexistingbusinessifthenewactivitiesarerelatedtoexperienceor qualificationsusedintheexistingbusiness.

EXAMPLEAbarrister,specialisinginpatentandotherintellectualpropertylaw,lecturedonweekend coursesonanadhocbasis(every2-3years).Itwasheldthatthiswasanactivityinthecourseor furtheranceofhisexistingbusiness(asabarrister).Ashisexistingbusinesswasalready registeredforVAT,heshouldhaveaccountedforVATonthefeesreceivedfortheweekend lecturing,astheactivityamountedtoanextensionofhiscurrentbusiness.BCReid[1993](VTD11625)

Self-employment

Whereself-employedindividualsareusedbyabusinesstoprovideservicestoits customers,thekeyquestionwhichHMRCwillconsideriswhethertheself-employed individualsuppliesservicesdirectlyto:

a.thecustomers,inwhichcasethesupplywillbemadebytheself-employedperson,and itmaybethatthetradeisbelowtheregistrationlimit;or

b.themainbusiness,whichinturnsuppliesservicesdirectlytotheendcustomer(in whichcaseitmaybethatthemainbusinessisregisteredforVATandconsequentlyVAT willbedueonthesupplies).

MEMOPOINTS ForfulldetailsoftheVATrulesrelatingtoagents,see¶63000+.

2.HMRCdirections

AdirectionissuedbyHMRCmustgivethefollowinginformation: –adescriptionofthebusiness; –nameofallthepersonswhoaretobetreatedascarryingonthesinglebusiness; –broaddetailsofthereasonsforissuinganoticeofdirection;and –thedatefromwhichregistrationasasingletaxableentityistotakeplace(which cannotbeearlierthanthedateofthedirectionitself).

Itmustbeservedoneachofthepersonsnamedinit;

Newbuildings

Abuildingisusuallyastructureofasubstantialsize,whichisintendedtobeenduringfora considerableamountoftime.Mostbuildingsarepermanentstructures. Thesupplyoffixtureswithabuildingistreatedaspartofthesamesupply,theVAT treatmentbeingthesameasthatfortheassociatedbuilding.

MEMOPOINTS 1.Afixtureisanassetthatisinstalledin,orotherwisefixedinorto,abuilding orlandsoastobecomepartofthatbuildingorlandinlaw(¶50385).

2.Achattelisatangibleandmoveableasset,althoughitcanbecomeafixturebybeingattached toabuildingorland(e.g.aradiator).

A.Whatisanewbuilding?

Identifyinganewbuilding,particularlywhenitisrelatedinsomewaytoanexisting building,iscrucialtoapplyingthecorrectVATtreatment.Acommercialbuilding(¶50440) istreatedasnewuntilitis3yearsold.Otherbuildingsareonlynewduringtheperiod runningfromcompletionofconstructionuntilthefirstonwardsupply.

1.Exclusions

Broadly,anewbuildingexcludesconstructioninvolvinganexistingbuilding,suchas: –theconversion,reconstructionoralterationofanexistingbuilding(specialrulesapply forthesetypesofworks(¶51470+)); –anenlargementof,orextensionto,anexistingbuilding,unlessanewdwellingiscreated (¶50465);or

–theconstructionofanannexe,unlessitistobeusedforacharitablepurposeand detailedcriteriaaresatisfied(¶50560).

Theplanningpermission,applicationandconsentfortheworkshouldidentifythenature ofthework.Themaintest,however,isthedifferencebetweenwhatexistedbeforethe constructionbeganandwhatexistsafterwardsi.e.whichphysicalcharacteristicshave changed,andwhateffecthastheworkhadonanyexistingbuildingsonthesite,including therelevantfunctionsofthebuildingsandanyinterrelation.

2.Demolition

Ifanexistingbuildingisdemolishedtogroundlevelandanotherbuildingiserected,the replacementbuildingwillbeanewbuilding(unlessitisareconstructionofthepreexistingbuilding(¶50250)).Theexistingbuildingwillstillbetreatedasdemolishedforthis purposeifasinglefaçade(doubleifacornersite)isretainedasaresultofaconditionof statutoryplanningapproval.

Ifdemolitionoftheexistingbuildingoccursafteraseparatenewbuildinghasbeen constructed,thedemolitionworkisnotpartoftheconstructionofanewbuildingforVAT purposes.

EXAMPLE

1.Adisabledpersonlivedinabungalow,whichheintendedtodemolishandreplacewithamore accessiblehome.Duringtheconstructionworksheneededsomewheretolive;duetoalackof alternatives,hehadtoremainintheexistingbungalow.Therefore,anextensionwasbuiltandthen theexistingbungalowwasdemolished. Itwasheldthatanewbuildinghadnotbeencreatedbecauseanextensionhadbeenbuiltfirst, eventhoughthepre-existingbuildingwasthenimmediatelydemolished.GrahamDavidGilder[2003] (VTD18143)

50250 InformationSheet 07/17

2.However,wheretheexistingbuildingwasdemolishedandentirelyreplacedaspartofthe constructionprocessforanewbuilding,thetribunalhasheldthatthiswasnewconstruction.The factthatdemolitiondidnotprecedecommencementofconstructiondidnotdecidethematter (¶51080).JandJWatson[2019](TC07513)

HMRC’sview

HMRChasgiventhefollowingexamples:

Situation

Makinguseofthefoundationsofapreviousbuildingthathasbeen demolishedtogroundlevel

Buildingontoanexistingwallofanotherhousetoformtwosemi-detached houses;nointernalaccessbetweenthetwoandplanningconsentdoesnot prohibitseparateuse,lettingordisposal

Buildingofanewhousewithinanexistingterraceofhousesonthesiteofa demolishedhouse

Constructionofaself-containedflatthatenlargesanexistingbuilding

Constructionofagrannyannexethatcannotbeusedseparatelyfromthe mainhouse

Detachedenclosedswimmingpool

Caselaw

Thebasictestappliedincaselawiswhetherareasonablepersonwouldsaythatabuilding wasneworpartofanexistingbuilding

CommentUsually,retentionofanypartofapre-existingbuildingdemonstratesthat constructionworkissomesortofalterationtothatpre-existingbuilding,whether reconstruction,enlargementorextension.However,inrarecircumstances,acompletely newbuildingcanbeconstructed(contrastexamples5and6below).

EXAMPLE

1.Acompanyredevelopedasite,whichmeantsomebuildingsweredemolishedandanew buildingwasconstructed.

Itwasheldthattheworkconstitutedtheconstructionofanewbuilding,ratherthanthe reconstructionofanexistingbuilding,becauseitwas“notareplicationorconstructionanewof whatwastherebefore”.WimpeyGroupServicesLtdvC&E[1988]

2.Acompany,whichownedamulti-storeycarpark,obtainedplanningpermissiontobuildablock offlatsabove.

Itwasheldthattheflatswereanewbuildingbecauseitwasinappropriatetoregardtheflatsas enlargingtheexistingcarpark.TridentHousingAssociationLtd[1993](VTD10642)

3.Anewresidentialbuildingwasconstructedsothatitadjoinedanexistingoldpeople’shome. Initiallytherewasnointernalaccessbetweenthetwohomes.Threeweeksafterconstruction,an interconnectingdoorwasinstalled.Theproprietorstatedthatthiswasduetofinancialconstraints imposedbecauseoftheunexpecteddeathsoffiveresidents.

Itwasheldthattheinitialintention(decisivetotheVATtreatment)hadbeentoconstructanew building.JMBStrowbridge[1999](VTD16521)

4.Anewdwellingincorporatedasinglewallofapreviousbuilding,whichwasnotrequiredby planningconsent.

Itwasheldthattheworkrelatedtoanexistingbuilding.Eventhoughanewbuildingwas undoubtedlyconstructed,theincidentalincorporationofasmallpartofanexistingbuildingwas fataltotheappellant’scase,becausethelegislationissospecific.PhilipEvans[2001](VTD17264)

5.Anursinghomewasconstructedonthesiteofanoldchurch.Thechurchitselfwas incorporatedinthenewnursinghome,comprisingthereceptionarea.

Itwasheldthatanewbuildinghadbeenconstructed,asthenewparthadaboutfivetimesthefloor areaoftheoriginalchurch.Itsodwarfedtheoriginalbuilding,thatitwasamisdescriptiontorefer totheworkasanenlargementorextensionofthatoriginalbuilding.Ingeneral,retentionofpartor allofanoriginalbuildingdoesnotprecludearulingthatanewbuildinghasbeenconstructed, albeitthatthecircumstanceshavetobeveryunusualforthattobethecase.HMRCvAstralConstruction Ltd[2015]

2.DIYhousebuilders

HMRCwillrefundanyVATchargeableonthesupply,acquisitionorimportationofany goodsusedinconnectionwithbuildingsconstructedotherwisethaninthecourseof business.

Timelimit

Since5December2023,refundsmustbeclaimedwithin6monthsofthebuildingwork beingcompleted,thedateofwhichhasbeensubjecttomuchcaselaw

MEMOPOINTS 1.HMRC’spolicyistoallowonlyonerefundclaim,butitwillaccept supplementaryclaimsinrelationtoworkscarriedoutbeforetheoriginalclaimwassubmittede.g invoiceswhichhavebeenleftoutinerrororissuedlatebythecontractor

2.Theclaimperiodforclaimssubmittedpriorto5December2023was3months.

EXAMPLE

1.Ithasbeenheldthatthecertificateofcompletionissuedbytheclaimant’slocalauthorityisthe onlypracticalwaytodecidewhenabuildinghasbeencompleted.ThispreventsHMRCarguing thatthetimelimithasbeenmissedbecausethebuildingwascompletedbeforethecertificateof completionwasissued.Itremainsopentotheclaimanttoapplyearlier,inwhichcaseHMRCwill considertheevidenceofcompletionprovidedintheabsenceoftheusualcertificate.LiamDunbar [2019](TC07504)

2.Inamorerecentappeal,contradictingexample1above,itwasheldthateachcasemustbe decidedonitsownmerits.

Thereisnohard-and-fastrulethatthedateofacompletioncertificategovernsthetimelimitfor makingaclaim.PaulandStephenWedgbury[2020](TC07619)

3.InScotland,itisnotlawfultoinhabitapropertyuntilaNotificationofAcceptanceofa CompletionCertificatehasbeenissuedbythelocalauthority. Ithasbeenheldthatcompletioninthiscontextcannotoccurbeforeissueoftheacceptance.Simon andJoanneCotton[2020](TC07553)

4.TheappellantsmadetwoclaimsundertheDIYbuilders’scheme.HMRCpaidthefirstbut refusedthesecond,onthegroundsthatthelegislationprovidesforonlyoneclaim. Itwasheldthat,althoughthelegislationrefersto“theclaim”,itisabasicruleofstatutory interpretationthatthesingularincludesthepluralandviceversa.Hence,morethanoneDIYclaim canbemadeandHMRCoughttohavepaidthesecondone.Incidentally,thefirstclaimhadbeen madebeforecompletionoftheproperty,soHMRCwouldhavebeenwithinitsrightstorefusethat claimbuthadnotdoneso.AndrewEllisandJaneBromley[2021](TC08277)

Onlineapplication

Adigitalclaiminrespectof:

newpropertymustbecompletedattiny.cc/vm51105N;or

conversions,shouldbemadeattiny.cc/vm51105C. HMRCshouldcommunicatetheclaimreferencenumberwithin2weeksaftersubmission. Theclaimshouldthenbeprocessedwithin3weeksofallinformationrequestedbeing produced.

Paperforms

Apaperclaimisstillpossible,althoughanyrepaymentmaybedelayed.Thefollowing documentsmustbesubmittedtotheaddressat¶90120: Form Covers

VAT431NB Constructionofnewbuildsdesigned: –asdwellings;or –forusesolelyforcertainresidentialorcharitablepurposes

B.Undisclosedagents

Inanarrangementinvolvinganundisclosedagent,thecustomerwillonlydealwiththe agent,andindeed,willonlyreceiveaninvoiceintheagent’sname.Astheprincipal’s detailswillnotbedivulged,thecustomermaynotevenbeawareoftheprincipal’s existence

ForthepurposesofVATregistration,allsuppliesmadebytheagent(includingthoseby theprincipal)aremeasuredagainsttheregistrationthreshold(¶90000).

TheVATtreatmentdependsonwhetherthemainsupplyismadewhollywithintheUK,or whethertheprincipalorcustomerbelongsoutsidetheUK.Itshouldbenotedthat, irrespectiveoftheVATposition,thelegalstanceremainsunchanged.

MEMOPOINTS

1.Theprovisionofelectronicallysuppliedservicesortelecommunication services(¶62000+)throughanagentistreatedbothasasupplytotheagentandasasupplyby theagent.Fordigitalplatforms,see¶61205.

2.Foruseofthesecond-handmarginschemebyagentsandtheirprincipals,see¶58285.

3.Fortheprovisionoftravelinsurancebyatravelagent,see¶65730.

b.Treatmentasanagent

Treatmentasanagentisonlyavailablefordomesticsupplies(whenboththeprincipaland thecustomer,orsupplier,arelocatedwithintheUK).

Sellingagent

Inthiscase,thesellingagentaccountsforboththemainsupplyandthecommissionas separateoutputsontheVATreturn,recoveringinputtaxonthesupplyfromtheprincipal. Theself-billingprocedure(¶28925+)maybeused(subjecttoHMRC’sapproval).

EXAMPLEALtdactsasanundisclosedsellingagentforPLtd,whoisVAT-registered.ALtdarranges asaleofgoodstoMrsCfor£600(netofVAT)andchargescommissionof10%. PLtdraisesaninvoicetoALtdfor£600plusVAT. ALtdraisestwoinvoices: –£600plusVATtoMrsC;and –£60plusVATtoPLtd.

63500

s47(4)VATA1994

63560 63565