Ran a wowcher deal - I am so confused

[IATM]

I will never ever run a deal again with the likes of such companies but I wanted to try it once and I am so confused.

Basically when I made the deal I asked clearly that the end deposits I would get would be say 8.99 however they have deposited me monies at said amount x 100 units sold explusive of VAT.

When I ask the question of why exclusive of VAT I get no answer. I guess what I am confused about is why have they kept the VAT element and how do I treat it on my books!"

please help

It was phyical goods I sold not a service or b&b stay etc etc

 

[STDFR33]

It might be that they thought you meant £8.99 retail, inclusive of any vat.

 

[IATM]

well yes when I discuss with them I said I will sell it to you for 8.99 inc VAT and I will cover postage cost and send out goods.

So therefore they should deposit me the 8.99 and the sales tax on this i send to HMRC and deduct my costs with VAT element on them. no?

 

[STDFR33]

If you agreed to sell it to them for £8.99 inc vat, and you have received £8.99 inc vat, where is the problem?
Or do you mean that they have actually paid you £7.49 per unit? I.e excluding vat?

 

[IATM]

they have paid me excluding VAT

 

[TheCyclingProgrammer]

So are you saying that they have instead sent you £7.49 (the ex. VAT amount) for each unit? How does Wowcher work? Do you effectively sell to them and they then sell on to the end customer? Do you invoice them?

If the agreed price from you to them was £8.99 inc VAT then that is what you should have received from them.

If you've charged them £8.99 inc VAT and they have charged the end customer £8.99 inc. VAT then the VAT they charged is cancelled out by the VAT you've charged them but they still owe you £8.99.

 

[IATM]

I have a breakdown of one of the days. I will provide it later. I had it in my head I charge them 8.99 they charge the end customer 8.99 plus postage at 2.99.
I take it they make their money on the 2.99 or so I thought.

 

[IATM]

Example of one of the payments they made to me with breakdown.

Payment for 57 order

Pre VAT, total Merchant payment value = £461.70
Total Wowcher Fee: £221.16
VAT Deduction: £44.23
Total Merchant payment value: £417.47
Merchant Payment Value per Voucher: £5.11
Wowcher Fee per Voucher: £3.88
Merchant Postage Commission: £2.99

Payable Sold: £690.00


So it looks like they have paid me (5.11+2.99)x57 order
Why? I dont know

 

[TheCyclingProgrammer]

I think you need to clarify - were Wowcher selling something on your behalf or were they just providing the end customer with a voucher that was used to then pay for your goods?

There is no VAT on any vouchers according to this:
http://businessdatabase.indicator.c...h_groupon_style_vouchers_/UKTAVAAR_EU03100301

But Wowcher would charge VAT on any fees they charge you.

 

[IATM]

As far as I know. They sell a voucher to a customer for X amount. They voucher is then used in their website to redeem the goods.

 

[TheCyclingProgrammer]

As far as I know. They sell a voucher to a customer for X amount. They voucher is then used in their website to redeem the goods.

So you sell something for £x inc. VAT.

Wowcher provides a customer with a voucher with the value of £x. There is no VAT on this transaction. Customer uses voucher to pay for your goods in full.

You redeem the vouchers with Wowcher - they pay you for each voucher they gave out.

Presumably they charge you a fee for this?
What are the postage fees for?

 

[gek]

It's all very complicated and Wowcher are not very upfront about the VAT side of things, even referring to the VAT on their commission as a reclaimable 'fee'.

VAT is payable on the face value of the voucher when it is redeemed for sale, i.e when the Wowcher customer uses it to buy from you. So if Wowcher are listing your item for £20, VAT is payable, by you, on the £20 when you receive the customer's order from Wowcher. There is no VAT on the purchase of the voucher itself, but that is nothing to do with you, that's between the punter and Wowcher.

Think of them as just like an Amazon or an eBay where they take the money from the customer, take off their commission, pass the order to you for fulfilment and you pay the VAT on the full value of the sale. The difference with Wowcher is they charge 44% commission in our case rather than the 15% on Amazon.


In answer to the OP's question, there is no contract between you and Wowcher when one of their customer's buys your product, the contract is between you and the customer so Wowcher are not withholding any VAT; I think you've just underestimated their commission.