UK Selling through an agent and VAT implications

May 31, 2018
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United Kingdom

I'm just trying to get to grips with the following scenarios, and their VAT implications. I would be very grateful if someone could provide some clarity please.

Basically, a director I know is planning to sell an asset (which isn't classed as inventory), and is selling through an agent. I don't know the country of the buyer yet, so I don't know if this transaction will be standard or zero rated VAT. Both the director's company and the agent's company is VAT registered though, and both are based in the UK.

In terms of the VAT treatment, if the agents act as disclosed agents, and they collect the money from the buyer and pass it straight on to the director, then would I be correct in saying that the agent shouldn't account for the VAT themselves (they're just acting as a conduit)? However, the director (principal) would account for any VAT received?

And if the agent is an undisclosed agent, then the agent must account for any output VAT received from the buyer, and also account for the input VAT paid to the director? Any the director mush charge VAT to the agent (regardless whether the buyer paid VAT or not)?

If I understood the above right, what is the minimum required to ensure that the agent is disclosed? For instance, is it ok for the agent to invoice the customer, as long as they make it clear to the customer that the contract is between them (the customer) and the director (principal)? Is there anything else that they should do?

From what I'm guessing, I think the agent is on the flat-rate VAT scheme, so I think they'd what to avoid paying VAT to the director at all costs.

Many thanks for your help.
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