We are a VAT registered taxi company. Up until now we use our own vehicles, invoice the client at a VAT inclusive rate and pay VAT accordingly.
We have now started taking bookings for other taxi firms. We take payment online, take a small commission of 15% and the rest is paid to the taxi provider upon completion.
How do we account for the VAT on these sales - i.e. although we may charge the client £100 + vat for a journey, our actual sale is £15 + vat.
Hello @air-link
Just to make sure we’re both on the same page, can I just confirm does the other taxi firm invoice you for their payment, or do you just pass it through minus your fee?
You will have to invoice end client 100+vat and get invoice from other taxi company for 85+vat, if they are vat registered if not then it depends if end client is aware of arrangement between you and other taxi company, if yes then you can invoice end client for 15+vat and rest show as disbursements which can be passed on to other taxi company
Hi QF Support
Thanks for replying.
We would just pass it on minus our fee.
Thanks for confirming.
You would charge the client the £100 + VAT - this would be your income.
The other taxi company that you’re working on behalf of would then need to invoice you for the £85 (VAT would be dependant on whether or not they are VAT registered). The other taxi company you would be working on behalf of would be your supplier.
The exception would be is if it’s treated as a disbursement (as @FaradayKeynes mentions above).
It may be best to run this past your own accountant to ensure it’s calculated correctly however (I’m not one).