Accounting VAT

  • Barry Newton

    Actor

    I have just had a query from my accountant as to why I have been charged VAT by an agent.It is his view that payment for work is classed as wage and as such not liable for VAT he is not a show business specialist and wonders if any one on CCP can understand this concept. He also has problems with registration fees especially when agents use free sites like Facebook,twitter etc as their sites.I am told we should not be afraid to challenge this it may cost us a few jobs but in the long run will put these grasping agents out of business,as true professionals will just not work for them.Equity used to be very strong now its up to us to fight for ourselves.

    • 20th Jan 2013
    • 7024
    • 9
  • Mark Kempner

    Actor

    Your accountant should get in touch with Equity, they have all the info he/she will need.

    My earnings are such that i am vat registered..and it is indeed a pain in the ass regarding getting the vat paid by the tv companies.

    As far as I am aware, you do need to charge vat on wages earned….and likewise assuming you agent is Vat registered of course….they will have to charge vat too. Vat on commission all applies too…but you really need to get Equity to give you the relevant information I'd have said.

    Registration fees other than extra agents….should not be charged to actors by law….I think?

    • 8th Sep 2012
    • 1
  • John Rayment

    Actor

    I think the jist of it is that, as a self-employed person, you're a business - and therefore it's not "wages earned" at all, it's a fee paid for a service, which certainly would attract VAT, all other things being equal.

    • 8th Sep 2012
    • 2
  • Nigel Peever

    Actor

    If your agent's turnover exceeds the 77 thousand pound threshold they are liable for VAT

    ie verbatim from the government site

    www.hmrc.gov.uk/vat/forms-rates/rates/rates-thresholds.htm#2

    "If you're in business, you must register for VAT if your VAT taxable turnover for the previous 12 months is more than £77,000. This figure is known as the VAT registration threshold. The threshold changes - usually once a year announced in the Budget - so you should regularly check your turnover against the current threshold."

    So they charge you commission they must pay the VAT to the government they must declare this clearly on their invoice for legal reasons. The only way round this is to find an agent with a tiny turnover less that 77,000...probably not a good idea..

    The agent is not acting wrongly!

    • 8th Sep 2012
    • 3
  • David McClelland

    Actor

    Yes, this is standard practice. I have two agents (presenter and actor) each of whom charge VAT on the commission they charge.

    • 11th Sep 2012
    • 4
  • Barry Newton

    Actor

    Thanks to all who are following this, there is now an inquiry being carried out. I can say that from the past self employed or not VAT is not chargeable on earnings,in past I had to fight this with Revenue as a self employed Sub-Post office.Needless to say I won.I also got the office cat as a taxable allowance a Post Office cat being like a Ships Cat.

    • 12th Sep 2012
    • 5
  • Mark Kempner

    Actor

    Welll I dont know how that works or if we have all missunderstood you. Can you give us an example?

    As far as i have ever been told...anything I do by way of charging for my service and it is to go through my books....will and must be charged with Vat.

    • 12th Sep 2012
    • 6
  • Kate Benfield

    Actor

    Sorry to dredge this up from the past, but I have a similar query and it doesn't seem like it needs its own new topic.

    I've just received some remittance advice from a SA agency I did some work for. While they agreed not to charge me NI as I pay my own, they did take a VAT charge from my fee. I think, gathering from what has been said above, this is right because the agency is quite large and their income will almost definitely be over £77, 000.

    But am I right in thinking that, as my own turnover is well below that amount, I don't need to charge VAT when I invoice companies for work not booked through an agency? i.e. it will only be work done through a large agency that requires VAT to be paid?

    • 19th Dec 2012
    • 7
  • John Burton

    Actor

    Hi Kate

    It's pretty simple so don't get too hung up on it.

    Companies whose income exceeds 77K will charge you VAT, that will include agents!

    It's a bit like logging onto Amazon and buying a laptop for £500 (ex VAT), you will actually pay £600 for it as it will incur 20% VAT.

    The company/agent etc do not keep this money as it is owed to HMRC but as they are VAT registered they are allowed to make VAT deductions from their VAT income for all the VAT THEY pay out to other VAT registered business' - phew!

    You must not charge VAT (unless you are hugely successful and earn over the threshold). If you do and you get caught, technically it's fraud and you could be in deep trouble.

    Unfortunately ignorance or "sorry I didn't know" will not wash with HMRC. They have more power than anyone, including the police, home office and immigration services.

    Good luck.

    John x

    • 20th Jan 2013
    • 8
  • Kate Benfield

    Actor

    Okay, great. Thanks for clearing that up John.

    I wasn't really planning on charging VAT myself, just making sure it was right for it to be deducted from my wages. I was ready to start challenging left right and centre otherwise! I've had enough experiences with companies trying to take as much money as they can to be wary with these things.

    • 20th Jan 2013
    • 9