Originally Posted by
CaptainProp
There are both types on the market, those that are transparent and those who are not. Everybody on the market, clients and service providers, know that there will be a broker fee of about 7-10% added to the actual cost of the trip. It’s not like it’s a secret so it’s up to you if you want to be transparent and play with your cards open and work towards building a long term relationship with your clients or not.
I don’t always know personally, but our private office would never accept a charter trip to be sold on our aircraft without knowing how much the broker, if there is one, is taking for their services.
CP
Hi CaptainProp,
I was thinking of a 7-10% arrangement fee. I was just unsure how invoices are presented to clients. Particularly if trips are in the UK and there is VAT. How is the invoice put together.
I have spoken to an accountant who has said the following;
I would suggest you describe your services to your customer as an ‘arrangement fee’, as this makes it clear you are not supplying the chartered flight. You would need to make full disclosure of the flight charter costs to your customer. Your customer can either pay the charter company direct, or pay the amount through you, but you must not make any profit on this. You would show the amount you are paying the charter company on your customers behalf separately on your invoice as a disbursement. This means you would only have to charge VAT on your arrangement fee:
· You would charge VAT to all customers in the UK
· You would charge VAT to all non-business customers in the EU
· You would not charge vat to businesses registered for vat in an EU country, as long as you quote their vat number on your invoice and complete an EC Sales list.
Another accountant I have spoke to has stated that do not need to charge VAT on anything, so as you can see, I have been told that I do not need to charge VAT and that I do so I have had conflicting comments.
Having worked with AOC holders, brokers have always refused to disclose their commission % to us.