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HMRC internal manual

VAT Traders’ Records Manual

Other invoicing arrangements for particular businesses: property managing agents

For VAT purposes, there are three invoicing procedures that can be used to collect rents:

  • the landlord issues a VAT invoice direct to the tenant and accounts for the output tax; or
  • the landlord issues a VAT invoice to an agent and the agent issues his own VAT invoice to the tenant. The supply is treated as a supply to the agent and a supply by the agent under the VAT Act 1994, section 47(3), and both parties account for the VAT accordingly; or
  • the landlord gives an agent written authority to issue VAT invoices on the landlord’s behalf. The VAT invoice should make it clear who is the principal and who is acting as the agent in the supply. The VAT invoices are copied to the landlord who accounts for the output tax. The written authority need not be in any particular form, but it must show a clear direction from the landlord to the agent to issue VAT invoices on the landlord’s behalf.

This procedure applies to all situations where agents issue VAT invoices on behalf of landlords, irrespective of whether the agent uses a computerised or manual invoicing system. If the agent has a long-standing arrangement with the landlord, he does not need to obtain written notification from the landlord. The landlord’s acceptance of the previous VAT invoices as his own will suffice.