Daily deals help!

[SnappyJen]

Hello,

I am struggling to get my head around advertising with daily deals and can't seem to find an answer anywhere. My accountant is also unsure.

So, if I sell 1000 units of a product at £100 on Amazon Local and they give £50 per unit. the revenue is:

Total for the deal: £100,000

Total paid to me: £50,000

How can I be expected to pay VAT on £100,000 of sales when I have only been paid £50,000 of sales?

We are talking bigger numbers than this, so the implications for me are huge. If I have to pay VAT on the full amount of the voucher instead of what I have actually been paid, I am in big trouble.

Can anyone advise? Is there an accountant out there who has experience of this as I would be happy to pay for advice.

Thanks

 

[StevensOnln1]

There have been plenty of threads on here about this and it generally comes down to whether the website is acting as your agent (i.e. it clearly states that you are the seller of the goods/service). If they are, the full amount paid by the end customer is your sale and the cut taken by the website is an expense.

 

[SnappyJen]

I have read through every single thread on the subject and I still cannot understand how I am meant to pay VAT on sales revenue I have never received?

I was accounting for VAT on the revenue I have received and not on the total sales value.

There must be a legitimate way to account for these sales properly?

 

[Kevin H]

This may seem a little obvious but can't you call Customs & Excise and ask them?

If necessary (because you are worried about them finding out about you before you know your liabilities) can you not get a friend/friendly business to call and say they are looking to do this and want to know how to get things 'right' before they start.

 

[greengecko]

I have read through every single thread on the subject and I still cannot understand how I am meant to pay VAT on sales revenue I have never received?

I was accounting for VAT on the revenue I have received and not on the total sales value.

There must be a legitimate way to account for these sales properly?

Amazon is simply acting as an agent, as said above, and shipping the item for you - taking their fee inbetween.

This would be no difference for you receiving the full amount, and Amazon invoicing you for £50 per unit sold.

 

[SnappyJen]

This would be no difference for you receiving the full amount, and Amazon invoicing you for £50 per unit sold.

How is that right because if Amazon did give me the full £100, I would then be happy to pay VAT on the money because VAT is based on turnover.

However, they don't, they give me £50, so having to pay VAT on a £100 sale doesn't work out.

Even if they invoiced me for marketing costs, this makes little difference to my turnover.

Sorry if I am being dense.

 

[Scalloway]

The £50 charge is for the privelege of having Amazon promoting your sales. If you were advertising in the local paper the charge would be part of your costs.

 

[greengecko]

How is that right because if Amazon did give me the full £100, I would then be happy to pay VAT on the money because VAT is based on turnover.

However, they don't, they give me £50, so having to pay VAT on a £100 sale doesn't work out.

Even if they invoiced me for marketing costs, this makes little difference to my turnover.

Sorry if I am being dense.

That's like saying you sold an item on eBay for £100. Yet they charge a 10% fee so you're only prepared to pay the VAT on £90 which you receive. It simply doesn't work like that.