Being charged vat by letting agents

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    Being charged vat by letting agents

    Hi All
    Qick question.Been renting my property out now since 2005.Previous 2 letting agents have never charged me VAT and thats with my property being managed by letting agents and them taking 10% a month plus also with the set up fee ect...Never charged me VAT
    I do of course do a self assesment every year and pay what ever income tax i have to pay.

    I have recently used a new letting agent,using there full management fees.They found a tenant and he moved in on the 29th march 2010.

    I have just recieved there statement of account :
    Tenancy set up fee £195.00 + £34.13 VAT
    management fee at 10% £52.50 +9.19
    PSG at £58.75

    So i have paid £43.32 total in VAT

    Can i expect them to add VAT to every months rent i recieve?

    There is no VAT taken out of my part time wage i earn and theres never been any VAT taken out of my full time wage when i used to work full time only income tax.

    Can someone out there give me some advise please.


    Originally posted by carl67 View Post
    Can someone out there give me some advise please
    Well first you seem to be muddling VAT and income tax.

    The agent is charging VAT on their service to you, in the same way as a plumber or solicitor would. They won't charge VAT on the amount of the tenant's rent (if they are collecting this for you) but on their fees.

    You pay income tax on your profits from letting (from which the agents fees, inclusive of VAT, is a deductible expense)

    As for why you weren't paying it with your previous agents - possibly it was inclusive, or more likely they weren't registered for VAT.


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