- Original Poster
- #1
I recently started a print on demand store on Redbubble, and am wondering how turnover/VAT should be treated in a venture like this.
(How Redbubble (and various other print-on-demand sites) work - I upload an image design and create a listing which appears on their website as various forms of merchandise (t-shirts, mugs, cushions etc) - they do all the hosting, printing, fulfilment and customer service. I set my 'artists margin' at a % per item, and receive a couple pounds per sale - all nice and passive.)
It would seem logical that the transaction is between the customer and Redbubble, and that the money I receive is a commission. The £16.38 for a t-shirt goes into Redbubbles income, and I recieve a £3.70 fee, which is my income from this venture. I tell the taxman about my few quid (paid out in a lump sum monthly). Simple
On further inspection, it seems things are not logical. They word things in a way that seems backwards - that the transaction is between the customer and myself, and they are a third-party facilitator.
I'm going to copy and paste the 'manufacturing invoice' email they send after each sale;
If they're the 'independent contractor' fulfilling a service - does that mean that my income from this sale should be recorded as £16.38, with 12.68 of expenses?
I wonder how many of RedBubble's successful users aren't aware of this and don't file accordingly - they could potentially be above the VAT threshold without realising it. Redbubble even seem to suggest not paying attention to the invoices and simply 'filtering' them to the bin; https://help.redbubble.com/hc/en-us/articles/360020135452
Seems a bit creative to me.
(How Redbubble (and various other print-on-demand sites) work - I upload an image design and create a listing which appears on their website as various forms of merchandise (t-shirts, mugs, cushions etc) - they do all the hosting, printing, fulfilment and customer service. I set my 'artists margin' at a % per item, and receive a couple pounds per sale - all nice and passive.)
It would seem logical that the transaction is between the customer and Redbubble, and that the money I receive is a commission. The £16.38 for a t-shirt goes into Redbubbles income, and I recieve a £3.70 fee, which is my income from this venture. I tell the taxman about my few quid (paid out in a lump sum monthly). Simple
On further inspection, it seems things are not logical. They word things in a way that seems backwards - that the transaction is between the customer and myself, and they are a third-party facilitator.
I'm going to copy and paste the 'manufacturing invoice' email they send after each sale;
The user agreement clause referenced at the end; https://www.redbubble.com/agreement#services-agreementHello again GLENGRAVING,
You may remember that you recently made a sale on Redbubble and as promised this is to signify that we have arranged the order to be shipped to your customer.
We’ve included this invoice for the fee incurred for the manufacturing of the product. Bear in mind, this invoice has been paid in full on your behalf to the manufacturer and you do not owe any money.
This invoice is solely for your records and no further action is required on your part. Perhaps you can post it on your bulletin as a testament to your hard work and success or perhaps you can put it in the bin for safekeeping, the choice is yours
Big love,
Mr Baxter - Head of Numbers
TAX INVOICE
Invoice number: [a series of numbers]
2019-07-29
T-Shirt of [product name] by [my store name]
Your Registered Address: [my home address]
Your VAT Number: Not supplied
Style: Slim Fit T-Shirt
Size: L
Body Color: White
Print Location: Front
Quantity: 1
Your Current Configured Margin %: 35.0%
Your Margin: £3.70
The sale details:
*Retail Price: £16.38 (includes VAT if payable by you)
Manufacturing fee including our facilitation fee: £12.68 (includes £2.11 in taxes)
^Total Margin: £3.70
Tax rate: 20.0%
This invoice has been paid in full on your behalf.
Please note that further to Clause 5 of appendix A of the User Agreement, you are responsible for accounting for Indirect / Sales Tax in the relevant country.
If they're the 'independent contractor' fulfilling a service - does that mean that my income from this sale should be recorded as £16.38, with 12.68 of expenses?
I wonder how many of RedBubble's successful users aren't aware of this and don't file accordingly - they could potentially be above the VAT threshold without realising it. Redbubble even seem to suggest not paying attention to the invoices and simply 'filtering' them to the bin; https://help.redbubble.com/hc/en-us/articles/360020135452
Seems a bit creative to me.
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