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Posted Mon, 15 Jul 2024 08:53:15 GMT by Matt
Dear Team, I am looking to set up an online business connecting life coaches and clients. The life coaches are self employed and my service would host a directory of coaches, provide a digital platform for the interaction between coaches and clients, and charge a fee to the clients for using this service. For example a client could choose their coach, pay for a video conferencing session with that coach on my platform, and from that charge, a proportion would be passed on to the coach (eg 75%) and a proportion would be kept by my business (eg 25%). My question relates to VAT that should be charged to the client if the coach is not VAT registered, but my business is. Would the payment to the coach be considered a disbursement and therefore VAT only applied to 25% of the fee kept by my business, or would VAT be payable on the total amount charged to the client? Alternatively, would this be considered a digital marketplace and subject to DST rather than VAT? Thanks in advance for your reply.
Posted Tue, 16 Jul 2024 12:25:04 GMT by HMRC Admin 8 Response
Hi,
With regards a payment being treated as a disbursement it has to meet all of the conditions in section 25.1.1:
Supplies made by or through agents: other situations
Unfortunately we do not  advise re DST please ref to link here:
Check if you need to register for Digital Services Tax
Thankyou.

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