It depends on the type of service supplied in return for the commission. Most commissions such as, for example, an estate agent’s commission are subject to VAT. Certain commissions for financial services are exempt.

In general, financial services are exempt from VAT, but some supplies although connected to financial services, are not exempt. These include debt collection and credit control, equipment leasing, management consultancy and registrar services. VAT charged on these input items would generally be allowable as an offset against your output VAT liability. An example of an exemption from VAT is the charges rendered by your bank for operating your bank account.