VTAXPER36000 – Issues to consider: agency and disbursements: revenue risks associated with agency
Since agents, potentially, only have to account for VAT on the value of their own agency services, incorrect classification of a principal as an agent will mean that output tax is accounted for on a much reduced value: the revenue loss may be considerable. There are also input tax risks associated with agency: in particular, companies may seek to reclaim input tax on expenses which are not their own, but are the expenses of unregistered agents acting on their behalf.
Source gov.uk
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