Business activity

10 February 2015

Issue: 4488 / Categories: Forum & Feedback , Business , VAT

Is a one-off commission received in the course or furtherance of a business?

A new client has hit the jackpot in relation to the sale of a chain of children’s nurseries. The nurseries are owned by a friend of my client who has acted as intermediary in bringing together his friend and another contact who is looking to expand his business interests in the UK and buy businesses in growing sectors.

My client is not in business (he is employed as a representative for a leading UK travel agent) and has no business income or income from self-employment. My question relates to VAT. My client will receive a commission of £100 000 from his nursery friend which exceeds the VAT registration threshold.

The nursery business is not VAT-registered (because it is exempt income) so any VAT charge by my client could not be claimed as input tax. My argument is that we could ignore VAT because my client is not “in...

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