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Charging VAT as a subcontractor?

Scenario: VAT registered Grounds Maintenance Contractor subcontracted to VAT registered Main Maintenance Contractor( who operate on flat-rate scheme, if that makes a difference) to upkeep grounds for Residents Association through a Factor.  Residents pay VAT once to Main Contractor?  So Grounds Maintenance Contractor charges VAT at 0%?  Or do you need to know what the breakdown of leasehold/freehold tenants are within association?

 

How is HMRC Public Notice 742 section 12 regarding Land & Property to be understood?  Slightly confused!

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  • Section 12 of VAT Notice 742 is primarily dealing with the VAT status of service charges, not the supplies of services that make up the service charge.

     

    If, as a subcontractor, you are VAT registered, you must charge VAT to the main contractor at the standard rate. The main contractor recovers the VAT you charge but must also make their charge subject to standard rate VAT.

  • PRO

    Neil, while I couldn't second guess the ins and outs of this situation, Tim's advice totally reflects what we were told a few years in relation to our sub-contractor status to a Commercial Facility Management Agent.

     

    I do have trouble getting my head around issues like this, but ultimately call in the experts and go with their advice!

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