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bigduckontax, Accountant
Category: Tax
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I am setting up an education agency. I will be charging parents

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I am setting up an education agency. I will be charging parents and students for services buy using self employed tutors and consultants. The company will be paying 50% of revenue as commission.

Do I pay VAT on the whole amount earned or just the revenue ( or commission) i receive?
Hello, I'm Keith and happy to help you with your question.

You charge VAT on the full invoice price. The fact that you subsequently paying out a percentage from the company is not relevant. For VAT purposes the invoice price is an output to which output tax is added. The commission paid is an input. Should any of your tutors charge VAT on their commissions then this would be an input tax which can be reclaimed through the VAT system. Were you an eligible body like a school, college or a university then your outputs would be exempt from VAT (see VAT notice 701/20), but this is not the case here. You can of course claim any input VAT suffered by the organisation on supplies, stationery, heating, lighting etc.

I hope I have been able to clear the air.
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Thank you for your support.