Commission

stevo5678

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!

deanshepherd

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.

stevo5678

Thanks Dean for a shoulder to lean on!