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Three’s a crowd

03 December 2013 / Neil Warren
Issue: 4431 / Categories: Comment & Analysis , VAT

The importance of dealing with VAT issues before a deal is agreed between multiple parties


  • Business transactions involving three parties can be complicated.
  • Important VAT considerations are the nature of the supply and consideration.
  • A service could be supplied for no consideration.
  • Check whether a trader is acting as a principal or an agent.
  • The nature of the supply between the various parties may change.

Transactions involving three parties often produce challenges in the world of VAT. In arriving at a decision concerning either the liability of a sale or whether the parties are acting as the principal or the agent great care and attention to detail are needed to fully review contracts and other paperwork.

It is also necessary to consider the views and perceptions of customers. With whom do they think they are dealing when they part with their hard-earned cash?...

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