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Do I Charge VAT as a Sole Trader?

Whether you need to register your business for VAT is determined by the value of your business’s taxable turnover, rather than the type of business in operation.You can register for VAT through mandatory or voluntary registration. When your business’s revenue exceeds the VAT registration threshold.

Acting as An Agent for VAT Purposes

In the matter of All Answers Limited vs HMRC, the Appellant ran a largely online business whereby customers were able to order various essays, pieces of coursework, etc, written by third-party writers who had no direct interaction with the customers. All Answers Limited would retain two thirds of the fee paid by the customer, with the remaining third being paid to the writer.

Commission relating to insurance is not always exempt

We often deal with businesses that have assumed that commission income they receive in relation to insurance services and financial services is VAT exempt. Unfortunately this is not always the case as in order to be VAT exempt the commission has to be generated from activities that meet a number of specific criteria.

Compensation Payments & VAT

As a rule, VAT is charged only on transactions that involve a supply of goods or services. When paying a compensation fee to another party, it is generally accepted that this does not constitute consideration for a “supply”, which means that VAT will not be due.