I'm currently registered for VAT and have agreed to start selling a range of hand made cards through my website. I don't buy the cards but I do send them out myself and any that don't sell are returned to the supplier. For my service I charge commission on the sales with the balance being sent to my supplier on a monthly basis.
What i want to know is do I have to charge VAT on the cards themselves or just on the commission figure?
If you raise the sales invoice then my guess is that it would contain vat on the whole price paid by the customer, but that you would then reclaim the vat from your supplier who would need to send you a sales invoice for their supply of the cards. The net result is that you effectively only pay vat on your own commission.
If you weren't to charge VAT on the cards, how would Customs and Excise obtain any revenue?
Clearly you are supplying cards and should add VAT to the price you are asking for them, and remit that to C&E.
Rgds,
__ Richard Buttrey Grappenhall, Cheshire, UK __________________________
"Richard Buttrey" wrote in message news: snipped-for-privacy@4ax.com...
I think you're right but I think the OP has slightly confused things...
Commission is paid when you are acting as an agent for someone else so that the contract of sale is with the principle but you are being paid for your services for the principle. In this case he would invoice the principle for the commission with VAT added.
In the OP's case he is actually buying the product from the principle as per any bricks and mortar shop and getting a refund on unsold stock. So VAT on the stuff he sells, VAT (if there is any) on all the stuff he "buys" and credits issued (with appropriate VAT adjuestments) on the stuff that goes back. And the payment terms sort out the cashflows.
E&OE
"Stephen Maudsley" wrote
I have lots of principles - I wish I could invoice them and receive commission!
No, seriously - did you mean "principal" ?
Yeah - the type you find in contracts
Yes, I'll go along with that.
Rgds
__ Richard Buttrey Grappenhall, Cheshire, UK __________________________
themselves
To be able to only charge VAT on the commission you charge the card vendors, you would have to have an agreement with them that you are acting as their agent, and make it clear when selling that the cards are being sold on behalf of the vendor. In such circumstances you would not account for VAT on the sale of the cards. See VAT Notice 700 para 22.5 for more details.
If you are acting as an undisclosed agent you would have to account for VAT on the sale of the cards. See VAT Notice 700 para 22.6 for more information. Best wishes
Robert Killington for help with VAT visit
Presumably, and in that case, it implies that the vendors themselves must account for the VAT on the sales price of the cards excluding commission?
Rgds __ Richard Buttrey Grappenhall, Cheshire, UK __________________________
Yes.
Best wishes Robert Killington for help with VAT visit
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