Reply To: VAT for online dental business

Forum Categories VAT ADMINISTRATION ISSUES VAT for online dental business Reply To: VAT for online dental business

#56144
Jm4910
Member

Thank you both for your detailed responses. It helps me a lot. I clicked on the “disclosed agent” link and at the bottom of that web page it said this:

“Where agents using 47(3) are involved with zero-rated supplies, they may zero rate their supply to the buyer if that supply would have been zero rated had the principal made it direct. An example might be where an agent passes on zero rated construction services on behalf of his principal. The principal would normally be entitled to zero-rate the supply, but cannot because that supply is now to an agent not directly involved in the construction. The principal must therefore charge output tax to the agent, but the agent may zero-rate the onward supply.

 
In this situation, the agent may reclaim the input tax on the principal’s supply to him; but this is not actually his input tax. He must therefore refund it to the principal; if he does not, the input tax retained is further consideration for his agency services. This is a separate supply on which tax is normally due.”

So do I understand it correctly that the business would firstly take the £100 payment (+ VAT on the £20 commission) from the patient, so £104. The dentist would then invoice my business for £80 + vat, so £96 but I can then claim a refund on the VAT from them? How can this happen if dentists aren’t registered for VAT? Or is it just a case of them not adding VAT in the first place? 

Thanks