Letting Agent Accounts

bigmuggsy

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

slackda

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.

lorraine

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.

deanshepherd

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.

lorraine

Okay, sorry I misunderstood!

bigmuggsy

Thanks for your help, much appreciated