Where a fee for, say, insurance is reduced because the adviser has received a commission for it, the VAT due is on that fee as shown on the invoice.

If the total fee is shown with the commission as a deduction on the invoice, VAT must be accounted for on the full fee (VAT Notes No. 1 (1988–89), para. 6).

Example 1: Commission set-off

Assume that the standard rate of 20% applies to all transactions.




Plus: VAT at 20%




Less: commission received


Amount payable



Need help? Get subscribed!

To subscribe to this content, simply call 0800 231 5199

We can create a package that’s catered to your individual needs.

Or book a demo to see this product in action.