Commission
stevo5678
Registered Posts: 325
Hi all,
If a consultant/broker of antiques acts as the middle person for the buyer and seller of a transaction and receives commission for the service, am I right in thinking that only the commission is recorded as sales for the middle man?
We are talking of large transactions of say £800,000 with commission being around £25,000. If more than the commission is recorded it would probably be over the audit threshold!!
In terms of invoicing the middleman may of invoiced in his own name despite the full funds just moving between buyer and seller direct. Am I right in advising the middle man client to only have an invoice raised in their name for the commission. They are acting as the facilitator in this transaction.
Cheers!
If a consultant/broker of antiques acts as the middle person for the buyer and seller of a transaction and receives commission for the service, am I right in thinking that only the commission is recorded as sales for the middle man?
We are talking of large transactions of say £800,000 with commission being around £25,000. If more than the commission is recorded it would probably be over the audit threshold!!
In terms of invoicing the middleman may of invoiced in his own name despite the full funds just moving between buyer and seller direct. Am I right in advising the middle man client to only have an invoice raised in their name for the commission. They are acting as the facilitator in this transaction.
Cheers!
0
Comments
-
If he is acting as agent then yes, the commission is his turnover. He can still act as an undisclosed agent, where the buyer believes he is acting in principal, and would therefore have invoices in his name. The legal reality overrides names on invoices but, yes, I would recommend that he did state the real sellers name if there is no reason to hide it.
As an aside for VAT purposes, if he does also buy and sell for himself, the second-hand goods scheme can usually be used so VAT will only apply on the margin.0 -
Thanks Dean for a shoulder to lean on!0
Categories
- All Categories
- 1.2K Books to buy and sell
- 2.3K General discussion
- 12.5K For AAT students
- 318 NEW! Qualifications 2022
- 161 General Qualifications 2022 discussion
- 11 AAT Level 2 Certificate in Accounting
- 56 AAT Level 3 Diploma in Accounting
- 87 AAT Level 4 Diploma in Professional Accounting
- 8.8K For accounting professionals
- 23 coronavirus (Covid-19)
- 272 VAT
- 92 Software
- 273 Tax
- 135 Bookkeeping
- 7.2K General accounting discussion
- 200 AAT member discussion
- 3.8K For everyone
- 38 AAT news and announcements
- 345 Feedback for AAT
- 2.8K Chat and off-topic discussion
- 582 Job postings
- 16 Who can benefit from AAT?
- 36 Where can AAT take me?
- 42 Getting started with AAT
- 26 Finding an AAT training provider
- 48 Distance learning and other ways to study AAT
- 25 Apprenticeships
- 66 AAT membership