Mobile phone top-ups...accounting for it
Discussion
I've been trying for the past few days to work this out in my head as I've realised I'm probably not accounting for it correctly.
Retail shop doing mobile phone top-ups. Say customer wants £10 voucher, so ring £10 on standard VAT rate and give voucher on payment. BUT that £10 then gets made up into an invoice by the agent for £9.68 or something with the remaining as our commission, which attracts standard VAT.
So should I be putting it through the till as zero rated then when the invoice comes in add the commission to sales? As otherwise I'm overpaying in VAT right? I asked the agents and their call centre didn't have a clue!
Its not massive amounts, but I'd like to get it right
Retail shop doing mobile phone top-ups. Say customer wants £10 voucher, so ring £10 on standard VAT rate and give voucher on payment. BUT that £10 then gets made up into an invoice by the agent for £9.68 or something with the remaining as our commission, which attracts standard VAT.
So should I be putting it through the till as zero rated then when the invoice comes in add the commission to sales? As otherwise I'm overpaying in VAT right? I asked the agents and their call centre didn't have a clue!
Its not massive amounts, but I'd like to get it right
You dont add vat when you do the till reciept and it should be zero rated so a flat £10 with no vat included
When you receive your self bill this will include the comission with vat added which you will account for and include in your return.
AFAIK if the customer requires a vat reciept they have to get in contact with the network provider.
When you receive your self bill this will include the comission with vat added which you will account for and include in your return.
AFAIK if the customer requires a vat reciept they have to get in contact with the network provider.
There is no output entry for VAT as weird as that sounds.
You do not Purchase the credit and then sell it so you have no means of reclaiming your input vat, You sell it on there behalf and they pay you a commision for which you are sent a self bill detailing how much you have sold and your commision you have earnt plus vat.
The moneys collected for selling the credit is normally debited from your account within two to three days minus your commision plus VAT, This is the only accountable vat which is then paid to HMRC.
You do not Purchase the credit and then sell it so you have no means of reclaiming your input vat, You sell it on there behalf and they pay you a commision for which you are sent a self bill detailing how much you have sold and your commision you have earnt plus vat.
The moneys collected for selling the credit is normally debited from your account within two to three days minus your commision plus VAT, This is the only accountable vat which is then paid to HMRC.
There are new disclosure rules issued by HMR&C for VAT errors, and depending on your type of business, VAT inspectors are well aware of the type of mistakes to look out for, see link;
http://customs.hmrc.gov.uk/channelsPortalWebApp/ch...
http://customs.hmrc.gov.uk/channelsPortalWebApp/ch...
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