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Estate Agents Fees + VAT ?

druss_the_axeman
druss_the_axeman Posts: 12 Forumite
in House buying, renting & selling
Just a quick simple question. Is it normal practice for estate agents to charge VAT on the fee when they sell your house. It's bad enough that their fees are way disproportionate to the work they do, but this just adds insult to injury.

I spent some time negotiating our fee down to 1.25%, only to find in the documentation that it's now 1.25% + vat, only to find that makes the fee 1.46%.

Also, I always thought the idea of VAT was that it was to cover the idea that an item could be sold on, how then can anyone charge VAT on labour or on fees like this.

Cheers
Duncan
You can judge the character of a person by how they treat animals.

Comments

  • Strapped
    Strapped Posts: 8,158 Forumite
    In a word, yes - it's "normal practice" (in fact, the law ;) )
    They deem him their worst enemy who tells them the truth. -- Plato
  • Mutton_Geoff
    Mutton_Geoff Posts: 3,817 Forumite
    Name Dropper Photogenic First Post First Anniversary
    I always account for this in my negotiations with estate agents. I find it odd that almost every other consumer business is not allowed to quote ex tax prices and yet EA's, for whom 99% of their customers are "retail consumers" are.
    Signature on holiday for two weeks
  • Strapped
    Strapped Posts: 8,158 Forumite
    From Directgov website:

    "Most retail prices on bills and receipts include VAT - it is not shown separately. However some may have a line under which they show the VAT element. This doesn't mean you're being charged extra - it just shows how much of the price is made up of tax.

    Non-retail invoices from VAT-registered suppliers (for example from builders or painters and decorators who are VAT registered) must show a separate amount for VAT. They must also show the 9-digit VAT registration number of the business."

    BTW, the point about checking for the VAT number is important, esp. if EA is a small independent. If they're not registered for VAT (and they don't have to be if turnover <£64k) then they could be charging it anyway and pocketing it...
    They deem him their worst enemy who tells them the truth. -- Plato
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