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My client, a software development company, has developed on app for cleaning services. My client acts as a facilitator to match householders, businesses etc with cleaners, takes the agreed fee and, once the job has been completed, he passes the fee minus a service charge to the cleaner.
Is the service fee or the entire charge liable to vat and at the standard or reduced rate?

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Posted by (Questions: 12, Answers: 6)
Asked on 19 December 2018 11:15 am
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I think it's 23% as he is not directly providing a service "consisting of the routine cleaning of private dwellings." VATCA 2010 Sch 3 para 9.

As regards the taxable amount, it depends whether he is an undisclosed agent (VATCA 2010 s 28) - if he is, his commission margin is treated as VAT inclusive (23%).

If he is not an undisclosed agent, then he is subject to VAT on the "the total consideration which ...[he]... becomes entitled to receive in respect of or in relation to such supply of goods or services, including all taxes, commissions, costs and charges whatsoever, but not including value-added tax chargeable in respect of that supply."

In other words, the gross amount - see VATCA 2010 s 37.

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Posted by (Questions: 5, Answers: 4797)
Answered on 27 December 2018 5:04 pm