VAT treatment of intermediaries and agents
Produced in partnership with John Fuszard of Sagars Accountants Ltd

The following Tax practice note produced in partnership with John Fuszard of Sagars Accountants Ltd provides comprehensive and up to date legal information covering:

  • VAT treatment of intermediaries and agents
  • Disputes over agency status
  • Example: employment agencies/bureaux
  • Example: travel agents
  • HMRC's approach to determining whether an agency exists
  • Disclosed or undisclosed?
  • Disclosed agents—basic VAT position
  • Disclosed agents—place of supply rules for intermediary services
  • Disclosed agents—zero-rating exported intermediary services
  • Examples
  • More...

VAT treatment of intermediaries and agents

IP COMPLETION DAY: The Brexit transition period ended at 11pm on 31 December 2020. At this time (referred to in UK law as ‘IP completion day’), transitional arrangements ended and significant changes began to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see Practice Note: What does IP completion day mean for Tax?

For VAT purposes, an intermediary is a person who makes arrangements for, or facilitates, a supply (being the main, or underlying, supply) between two other people. An intermediary may also be referred to as an agent or broker or, mainly in an EU context, commissionaire.

HMRC describes an agent as someone who arranges supplies of goods or services between the agent's customer (ie the principal) and a third party by:

  1. obtaining goods or services for the principal (ie as a buying agent), or

  2. finding customers for the principal to sell to (ie as a selling agent)

Agents are therefore involved with two supplies:

  1. the supply between their principal and the third party, and

  2. the supply of their own agency services to the principal, for which a fee or commission is usually charged

Disputes over agency status

HMRC views agents, or those claiming to be agents, as posing a risk of a significant loss of VAT.

Popular documents