Travel Agents Commission
Hopefully I've posted this in the correct place now.
I have been approached by an LLP who operate as travel consultants. The two partners were previously employed by The Original Travel Co Ltd and still operate from the same premises. The equipment still belongs to the Ltd Co and the LLP are simply allowed to use it. A 25% commission is paid to the LLP by the Ltd Co on the sales it generates which covers rent, rates, heat and light. They are also recharged for advertising, telephone and stationery expenses and this is deducted from their commission.
All monies from clients are paid direct to the Ltd Co and the commission is paid to the LLP once a month. The LLP incur a small amount of other expenditure ie postage, advertising display etc and these are the only monetary transactions going through the company as the Ltd Co pay the tour operators.
I am trying to establish whether the commission is taxable as they may well reach the threshold for VAT registration. The LLP think the commission is not taxable and that they do not need to register. One of the partners was previously in partnership with her husband selling financial services and advice where a lot of their turnover was commission. Their turnover was well over the registration threshold and they were not VAT registered and they are presuming that all commission received works the same way.
I have searched through HMRCs vat guidance and cannot find what I am looking for. Does anyone have a similar client or know whether they should be VAT registered if they reach the threshold? Any advice would be gratefully received.
- Your comments please 134 4
- CGT history of shares 96 2
- So who has completed a 2015 tax return then? 658 14
- Should a non trustee sign Scottish charity accounts? 182 1
- Ordering same-day transactions 82 2
- As a soletrader taxi service, would purchasing low emissions taxi-cars qualify for AIA capital allowance? 175 2
- VAT on Royal Mail Parcel Services 48 1
- Closing my business down 322 20
- Is there any good reading I can obtain to do self assesment on partnerships? 117 1
- Recording Calls 63 1
- Accounting for reversed transaction 69 1
- Scams are not always obvious 2,277 37
- Auto Enrolment - Director Only Answer 1,493 21
- What do you all do in your spare time? 916 36
- Charity requirements to report ALL I&E in accounts 73 1
- VAT flat rate scheme 162 2
- CIS Subcontractor Catch Twenty Two Position after 14 years 254 3
- How do we get US withholding tax back? 253 4
- VAT on long lease in comercial property that has opted to Tax 203 6
- Director - earning less than £8500 and no taxable benefits - PllD? 167 1
- Moving away from CCH software 959
- QROP pension input amounts 446
- write off loan or loan to equity swap or both 389
- HMRC BENCHMARK EXPENSES 368
- fraud 292
- EIS relief on transferring shares to spouse 265
- Sole trade business in UK, but the owner works from EU 234
- Construction CIS LLP Company 218
- EPS and CIS deductions 210
- Out of time or not? 193