taking on self employed brokers

We are VAT exempt.

I am potentially taking on another broker and just taking a cut of what they earn. I will take the hit on the costs, if they are not earning within 3 months chances are they will not be doing the job for very long anyway - PI is based on the previous years turnover so them not earning in the interim should not be a problem. 

Compliance - how much are they going to incur in costs if they are not earning that much?

It is only really a CRM/Sourcing system that you are forking out which if you are looking to grow, I am sure you can afford to take a risk on. 

I am doing this right now too.

Make sure you cover all bases, there's loads to do in terms of T&C (especially if they are not CAS) and it will take a lot of your time, make sure it's worth it.

Re VAT - someone once told me that if you take your fee upfront (like the sensible among us), it is subject to VAT. I never researched it myself, any tax wizards out there?

https://www.gov.uk/guidance/vat-exemption-and-partial-exemption#exempt-goods-and-services

wondering then for those who are with networks, do they charge VAT on the monthly fees paid by brokers?

From what I remember (and the HRMC web site isn't as clear as I thought it was) - if you provide advice - without the intention of a transaction occurring, it is VATable.

If the intention is for a transaction to occur and so charging a fee at the DIP stage, would seem to meet that requirement - although a fee for just research might not.

On what to charge  - as others have said - basic T&C will cost you time, even if they don't do much business - but if you charge too much, people will not join.

Do you buy in compliance support - or do you have necessary T&C/Compliance skills/knowledge?

Thanks for your replies.

I was initially thinking of charging a monthly fee and then paying a higher % on commission but then not sure now. Think I will need to get some advice re VAT.