How do you account for turnover??

[Jon123]

I believe this has been discussed before and also believe that there are operators on both sides of the fence but how do you deal with your turnover / comission.

Is your turnover what you take minus comission or is it the whole coin in the machine and then you put comission down as an expense.
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When selling on the basis of turnover share it is exactly that and sites should!! be recording this as income recieved and therefore pay vat on it if they are vat registered. which would mean you would only record and pay vat on the turnover you take away.

Anyone sought any accounting advice or HMRC advice on this subject.

Cheers
Jonny

[Ade]

i done my tax return myself for last year and only used income after commission paid, way i see it i have a reciept book showing site has had their share, and im not responsible for what they have done with it once its handed over


Ade

[Eatsweets]

Jon

Turnover is total sales, so all the money in the machine.

Commission goes down as a fixed cost along with your stock, premises etc..

You declare the vat on your total turnover but obviously you claim back all the vat on your purchases.

After you strip out all your costs the figure you are left with is your profit, which you would then pay tax on.

[PGBrew]

Jon,

I agree with Rob, I have also been so advised by my accountant. Turnover is the full sale value including commission. If you are excluding commission from your turnover figure(which is incorrect!) make sure that your total turnover does not exceed(com @ £20%) £57,600, otherwise you will be clobbered for VAT if inspected.

Using the full turnover value makes it easier to calculate your cost of sale (turnover x average cost of can = cost of sale) makes accounting simple.

Pete

[Venderbase]

Yes it the full £1 I'm afraid. Turnover is your sales regardless of expenses.

On normal VAT scheme you would claim back the vat on the commission paid, but on the flat rate scheme you pay the vat on the £1 and the landlord should also pay VAT on his commission.
Nature of the beast in afraid. This is why the flat rate scheme isn't always beneficial.

[sadler2886]

i too tke the full turnover and then take the commision off as a biz expense, its much easier doing it that way.

[Jon123]

I am on the flat rate scheme, and also declare full turnover and comission as expense.

what I don't get is how it works with the site recieving the money and then also paying vat as this means vat is being paid twice which shouldn't be happening.

What ade says makes perfect sense however so do the other arguments.

Daz am I right in saying if I was normal vat registered i would claim back the comission minus vat

so if a site did £120 I would pay comission on £100 which say for arguments sake is also £20 then reclaim £3.33??

Cheers
Jonny

[Venderbase]

Technically the site should give you a VAT receipt for the commission and you'd claim the VAT back, so it wouldn't be getting paid twice. But on flat rate you don't claim it back so yes it gets pai twice.
Thats the reason you get a low rate, because they know they get double VAT on low cost items.

If you sold wholesale on flat rate scheme, you'd pay bookers vat on your purchase, then pay vat on your turnover from selling it on to someone else.

[Coin Operated Group]

Technically the site should give you a VAT receipt for the commission and you'd claim the VAT back, so it wouldn't be getting paid twice. But on flat rate you don't claim it back so yes it gets pai twice.
Thats the reason you get a low rate, because they know they get double VAT on low cost items.

If you sold wholesale on flat rate scheme, you'd pay bookers vat on your purchase, then pay vat on your turnover from selling it on to someone else.

The site should in reality raise an invoice for you to collect their commision, this is what we do when giving large commisions to sites.

[Coin Operated Group]

Technically the site should give you a VAT receipt for the commission and you'd claim the VAT back, so it wouldn't be getting paid twice. But on flat rate you don't claim it back so yes it gets pai twice.
Thats the reason you get a low rate, because they know they get double VAT on low cost items.

If you sold wholesale on flat rate scheme, you'd pay bookers vat on your purchase, then pay vat on your turnover from selling it on to someone else.