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HMRC internal manual

VAT Valuation Manual

Specific applications: commissions

Accounting for commission retained by agents

When taxable persons supply goods or services through other traders acting as their agents, the value for VAT is their gross charge including the agent’s commission, even though they may receive only the net amount from the agent. If both traders are taxable persons the agent will issue a tax invoice for commission so that the principal may obtain the appropriate input tax deduction.