Estate agency accounts and tax

Just your commission, and this is the single most common error in agency accounts. FRS 102 23.36 requires you to determine whether you promise to provide the service yourself, making you a principal, or to arrange for another party to provide it, making you an agent. 23.37 makes the test control: whether you control the specified good or service before it transfers to the customer. A lettings agency collecting rent controls nothing — the rent is the landlord's income passing through your client account. It is not your revenue and it should never appear in your turnover. The same reasoning applies to contractor repairs, referencing and inventories arranged on the landlord's behalf: only your margin is revenue.

It depends on your terms of business. FRS 102 does not contain a sector rule, and neither the FRC nor HMRC has published anything fixing a single date for estate agency commission. What the standard gives is a framework: 23.78 to 23.80 ask whether control transfers over time or at a point in time, decided at contract inception, and 23.85 onwards lists the indicators — including whether the entity has a present right to payment. What decides it in practice is your contract, which the law requires to be explicit anyway: EAA 1979 s.18 requires you to give the client, before they are committed, particulars of the circumstances in which they become liable to pay. Sole agency with commission due on completion recognises on completion. Commission earned on exchange recognises on exchange.

Section 23 was completely rewritten, and Section 20 changed too. The Periodic Review 2024 replaced the old revenue section with Section 23 Revenue from Contracts with Customers, based on IFRS 15 principles, effective for periods beginning on or after 1 January 2026 with early application permitted. Transition is either fully retrospective or modified retrospective. The five-step model now applies: identify the contract, identify the performance obligations, determine the transaction price, allocate it, and recognise revenue as each obligation is satisfied. Separately, Section 20 brings operating leases on balance sheet for lessees — which affects every agency with a high-street office lease and changes what your balance sheet looks like to a lender.

Differently from each other, under the Section 23 rules for periods beginning on or after 1 January 2026. A management fee is a performance obligation satisfied over time — FRS 102 23.81 covers the case where the customer simultaneously receives and consumes the benefit as you perform — so it is recognised across the management period. A tenant-find or let-only fee is a point-in-time obligation satisfied when the tenancy is secured. Renewal commissions are the hard case: whether the renewal is a separate performance obligation or a material right granted in the original contract. Section 23 has explicit requirements on non-refundable upfront fees and customer options at 23.29 to 23.35, and that is where the answer lives.

Only if it meets all eight of HMRC's disbursement conditions. HMRC's eight conditions, set out in VTAXPER39000, must all be met — including condition two, that the client and not the agent used the goods or services. Revenue and Customs Brief 6 of 2020, following the Brabners case, sharpened the test: a fee is not a disbursement where you use the output in making your own supply of professional services, because it is then a cost component of that supply. Portal advertising fails these conditions, because Rightmove supplies the service to you. Tenant referencing is directly analogous to Brabners, because you use the report to form your own recommendation. An EPC can be a disbursement, but only if the assessor contracts with the seller and you pay as authorised agent. Buy it in your own name and it is a recharge.

Worse than it was, and worth re-running. Dividend rates rose on 6 April 2026: the ordinary rate to 10.75% from 8.75%, the upper rate to 35.75% from 33.75%, with the additional rate unchanged at 39.35%. The dividend allowance is £500. Employer National Insurance is 15% above a £5,000 secondary threshold, and the Employment Allowance is £10,500 with the old £100,000 prior-year-liability cap removed — though a company whose sole director is its only employee still cannot claim it. Corporation tax is unchanged at 19% up to £50,000 and 25% above £250,000, with marginal relief between and the limits divided by the number of associated companies plus one. For a multi-branch group held through several companies, that division is the number to check first.