VAT on Management fees re. Major Works

[funkster]

I have read another thread on this site concerning this (http://www.landlordzone.co.uk/forums/showthread.php?t=19888&page=3) but am not sure it answers my query, which is about 1. the validity and 2. the procedure of a Managing Agent charging VAT on fees in connection with Major Works organized by them.

We had major works to the value of about £34,000 done here. VAT was charged on top of this by the surveyor and builder, which is fine, as I have seen all the invoices and noted VAT reg numbers and other necessary VAT details.

The Managing Agent has charged 10% fees on the £34k, and have also added VAT on this, of about £500. My two questions therefore are:

1. Do the Managing Agents have the right to charge VAT on their fees at all. I understand (please put me right if I am incorrect) that other expenses in connection with service-charges are VAT exempt or zero-rated (unless of course passed on from a 3rd-party), and the Managing Agent does not charge VAT on their routine yearly management fee.

2. What is the correct procedure for this Managing Agent to charge this VAT amount. No VAT invoice has been issued for this showing reg. no. and all other necessary details. It is simply listed in a "Statement of Major Works" that totals all the various charges incurred. I have never seen a VAT reg number for company, and remember the same thing occurred in the last Major Works several years ago, though a small sum only was entailed. Should I challenge this; also would it be possible to check their VAT registration with HMRC and if so how.

[quarterday]

I have read another thread on this site concerning this (http://www.landlordzone.co.uk/forums/showthread.php?t=19888&page=3) but am not sure it answers my query, which is about 1. the validity and 2. the procedure of a Managing Agent charging VAT on fees in connection with Major Works organized by them.

We had major works to the value of about £34,000 done here. VAT was charged on top of this by the surveyor and builder, which is fine, as I have seen all the invoices and noted VAT reg numbers and other necessary VAT details.

The Managing Agent has charged 10% fees on the £34k, and have also added VAT on this, of about £500. My two questions therefore are:

1. Do the Managing Agents have the right to charge VAT on their fees at all. I understand (please put me right if I am incorrect) that other expenses in connection with service-charges are VAT exempt or zero-rated (unless of course passed on from a 3rd-party), and the Managing Agent does not charge VAT on their routine yearly management fee.
if the managing agent is vat registered they should charge vat on all their invoices

2. What is the correct procedure for this Managing Agent to charge this VAT amount. No VAT invoice has been issued for this showing reg. no. and all other necessary details. It is simply listed in a "Statement of Major Works" that totals all the various charges incurred. I have never seen a VAT reg number for company, and remember the same thing occurred in the last Major Works several years ago, though a small sum only was entailed. Should I challenge this; also would it be possible to check their VAT registration with HMRC and if so how.

it is not permitted to charge vat unless the "trader" in this case the managing agent is WAT registered and the tax is paid to hmrc. the managing agents' client, the landlord would get the invoice which is why you just get to pay your proportionate amount of the gross cost. The invoice is almost certainly required for the annual audit of the service charge

[funkster]

the landlord would get the invoice which is why you just get to pay your proportionate amount of the gross cost.

Thanks, I'm not quite sure I understand your sentence above; are you saying I don't get the VAT invoice, the landlord does? Shouldn't I get the VAT invoice as the person being charged (the leaseholder).

[quarterday]

Thanks, I'm not quite sure I understand your sentence above; are you saying I don't get the VAT invoice, the landlord does? Shouldn't I get the VAT invoice as the person being charged (the leaseholder).

No, you are bound to reimburse the landlord the proportionate part of the managing agents' fee. The managing agent invoices his client, typically the landlord. The only exception to this would be where the managing agent is employed by the management company, if there is one.


Whether or not the landlord, or for that matter you or conceivably the management company is registered for VAT, the VAT to which you are contributing through the service charge account either on contractors' invoices or managing agents fees is wholly irrecoverable by the residential leaseholder as residential accommodation is an exempt supply.

[funkster]

No, you are bound to reimburse the landlord the proportionate part of the managing agents' fee. The managing agent invoices his client, typically the landlord. The only exception to this would be where the managing agent is employed by the management company, if there is one.


Whether or not the landlord, or for that matter you or conceivably the management company is registered for VAT, the VAT to which you are contributing through the service charge account either on contractors' invoices or managing agents fees is wholly irrecoverable by the residential leaseholder as residential accommodation is an exempt supply.

Thank you; in this case, am I at least entitled to see a copy of the VAT invoice to the Landlord from the managing agent, of which I have to pay a share, and which contains all the VAT details. I have seen the invoices from the builder and surveyor to confirm these expenses; does it not therefore follow I should be able to see the properly-formulated VAT invoice for the managing agents fees, instead of just seeing it the amount listed in a statement of expenses. I am not trying to recover VAT, I simply wish to check that all is as it should be.