Readers' forum: Agent

A client rents out four residential properties and uses a letting agent to manage the properties and collect the rents. My client’s concern is that repairs to the property (when needed) are carried out by maintenance contractors who are below the VAT registration threshold. But when the letting agent deducts the cost of the repairs from my client’s monthly rental statement he adds 20% VAT.

Surely this is incorrect – the supply of services is from the builder to my client and the agent is only acting as paymaster. Or have I misunderstood the situation? Would it be any different if the builder addressed his invoice to my client rather than the agent?

Query 19 310– Rental Roger.

Reply by Gardener

Is there good reason for not treating these supplies as disbursements?

The key to this query lies in the contracts. If it is true that the supply of services is from the...