Letting Agent Accounts

bigmuggsybigmuggsy Feels At HomeRegistered Posts: 92
Hi

Got a client who is a letting agent, limited company. Have done the accounts however do I treat the difference between what they have received from tenants and paid to the landlords as turnover or is it simply a case that the turnover is the whole amount received.

As an example client receives £600 from tenant, retains £100 as the fee and pays £500 to landlord. Is the turnover therefore the £600 received or the £100 fee retained?

Any help appreciated.

Thanks

Comments

  • slackdaslackda Trusted Regular Registered Posts: 460
    Well,

    I would say the fees generated i.e the £100 is the turnover,

    Depends though i suppose on who the contract lies with the agent or the landlord, if the contract lies with the agent the £600 is due to the agent not the landlord and there is a seperate contract between the agent and the landlord for the transfer of the rest of the rent, which would effectivly be a cost of sale..... not 100% sure that is correc though.
  • lorrainelorraine Trusted Regular Registered Posts: 400
    slackda wrote: »
    Well,

    I would say the fees generated i.e the £100 is the turnover,

    Depends though i suppose on who the contract lies with the agent or the landlord, if the contract lies with the agent the £600 is due to the agent not the landlord and there is a seperate contract between the agent and the landlord for the transfer of the rest of the rent, which would effectivly be a cost of sale..... not 100% sure that is correc though.

    I would have said £600.00 is the t/o and then less the £500.00 which is a cos leaving £100 as gross profit.
  • deanshepherddeanshepherd Font Of All Knowledge Registered Posts: 1,809
    I have never known a letting agent to act as principle rather than agent so I would agree with Slackda's first assertion.

    The £100 is the turnover.
  • lorrainelorraine Trusted Regular Registered Posts: 400
    Okay, sorry I misunderstood!
  • bigmuggsybigmuggsy Feels At Home Registered Posts: 92
    Thanks for your help, much appreciated
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