self employed VAT on commission

[emma tate]

I am a self employed teacher and I am not VAT registered. One of the agencies that provides jobs for me wants now to charge VAT on the commission I pay them because they have become liable for VAT I can't pass this charge on to my clients. Can they do this because it means that I get 17.5% less on my fee?
Any ideas?

[MrRobin]

Can they do this?

Unfortunately for you, yes they can. If they have reached the threshold for being VAT registered then they have to, by law, register for VAT and start charging it on everything that is making a supply of services.

However, by doing this, they are surely pis***g off several of their service providers, including you, because you do not charge VAT yourself. I would recommend you negotiate with them, explaining that they are now taking more than an acceptable chunk of your income, and if it's a no go then ditch them in favour of the other agencies that you are in contact with.

[emma tate]

friend advice

I posted this thread because a friend of mine who used to be an accountant told me they couldn't do it except by changing in writing the terms of the contract, which they didn't do.

[n5gooner]

this is the same thing that used to happen to me with the rental flats, the chap who mamanged them (although I say that loosly!!) was VAT reg. so charged me the VAT. the chap I now have is not, so I save 17.5% on the management charge......