One payment from multiple companies via an agent

[smorlans]

Can someone advise on the best way of allocating one payment to several invoices? The company has an agent who invoices on its behalf and collects payments plus VAT. The agent then deducts its own commission plus VAT and transfers the remaining balance to the company. There is therefore one payment on the bank statment covering different companies invoices, including VAT and the agents commission plus VAT. I have been advised that the VAT on the paid invoices needs to appear on the company’s VAT return and not the collecting agents VAT return. Thanks

[QFMathew]

Hi @smorlans

This would be treated in a similar way to merchant service providers such as a card processing company. We have a guide on setting this up here: Handling payments from merchant accounts

Hopefully that helps, but please do let us know if you have any questions

[smorlans]

Thanks Mathew. Got it!