Commentary

V7.457 Undisclosed agency arrangements

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.457 Undisclosed agency arrangements

Part V7 Tax planning | Commentary

V7.457 Undisclosed agency arrangements

It is possible that a principal selling goods will want to keep his identity secret from the final customer and arrange for the entire deal to be handled by his agent. In such cases, it will be necessary for the agent to raise the final sales invoice to the customer in his own name, and then the principal will raise his sales invoice to the agent for the same amount. The agent will still charge his fee/commission to the principal. The HMRC approach to this situation is as follows:

  1.  

    •     the commercial basis of the transaction remains unchanged – the main supply still being between the principal and the final customer. However,

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