Shine a light

I have a client who is based in the UK and registered for VAT.

He buys and sells table lamps and one deal produces annual sales of about £500 000 for the business in relation to goods that he buys in China – and they are shipped directly to a customer in Dubai i.e. the goods never enter the EU. My client takes ownership of the goods in China.

My client pays two different agents (self-employed) a 10% sales-based commission for arranging these sales and ensuring that everything runs smoothly.

One agent is based in the UK and charges VAT on his fees to my client i.e. £50 000 plus VAT each year; the other agent is based in Dubai and charges £50 000 without VAT.

My questions are as follows.

First can my client claim input tax on the fees charged by the UK agent –...