Management Agents & VAT

[WHAT'SFREE?]

Wondering if anyone can shed any light on this issue please?

If the Management Agent is VAT registered, then they don’t pay (or claim back) the VAT which is charged by the various contractors providing services to the development (ie landscapers, window cleaners, parking control company etc).

If that is correct, then why, when residents' fees are calculated and budgets circulated are the management fees based on the VAT INCLUSIVE costs?

Am I mistaken, or is the Agent pocketing the balance between the ex and inclusive of VAT charges?

 

[z109]

Are you sure it isn't because the management company is charging you VAT? As I understand it, if you are VAT registered, you must charge VAT on the invoices you send out.

 

[mathepac]

...

If the Management Agent is VAT registered, then they don’t pay (or claim back) the VAT which is charged by the various contractors providing services to the development (ie landscapers, window cleaners, parking control company etc).
...
Am I mistaken, or is the Agent pocketing the balance between the ex and inclusive of VAT charges?

Ask for their VAT regisitration number (if they charge VAT on their invoices it must be shown).

If they are registered, they don't (or at least they shouldn't) "pocket" any balance, they pay it over to the Revenue.

 

[Stupid Boy]

Fees are VAT inclusive... Agents don't pocket any difference.

 

[markpb]

Are you sure it isn't because the management company is charging you VAT? As I understand it, if you are VAT registered, you must charge VAT on the invoices you send out.

That's pretty much it. The invoice is issued by the managing agent but only on behalf of your management company. The money goes into your management company's bank account so the vat status of the agent isn't important. When your company pays a contractor, the VAT is billed to your management company so, again, the vat status of the agent isn't a factor.

Just keep thinking of the agent in the same terms as the waste collection company or the landscaping company and it's much clearer. They provide a service to your company so how they operate their business (or finances) is unimportant.