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HMRC internal manual

VAT Small and Medium Enterprises Assurance Manual

Introduction to assurance: agents selling on commission

This applies whether they are employees of the registered trader, or whether they operate as independent traders. If they are independent registered traders, they will be included in the risk analysis programme. When agents carry stock, enquiries should be made as to the arrangements for;

  • controlling issues to them; and
  • accounting for tax on supplies, which they negotiate.

When high volumes of supplies are made via unregistered agents, it should be confirmed whether the latter acquired the goods for resale and, if so, whether tax is being calculated by reference to the ultimate selling price. If not, consideration should be given to the issue of a Notice of Direction under the provisions of VATA 1994 Schedule 1, paragraph 2.