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Agents' Turnover

Finchy01Finchy01 New MemberRegistered Posts: 11
One of our clients has an internet company, they act as agents for a number of suppliers.
It is quite clear on the paperwork to the customer that they are agents and the supplier details are shown.

The customer pays into our clients' account the full amount, we produce a sales invoice to the supplier for the commission element of the sale and send the difference from the sale to the supplier and retain the commission.

My question is - should the Turnover be the cost to the customers - suppliers do not produce invoices and therefore there are no cost of supplies - or should the Turnover be just the value of the commission to the suppliers.

I would very much appreciate any help and advice with the above.

Comments

  • MonsoonMonsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,071
    It sounds to me like the agent's turnover is the commission and not the gross fee.

    The supplier does need to invoice someone though (presumably the end user) - and that would need to be proven in order to assist the agent to prove their turnover is the commission only. I don't know whether VAT is an issue - but obviously turnover will differ greatly depending on whether you can prove which value is the turnover and this may have an impact on VAT.

    Is there a written contract?
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