When is sale recognised in an agency who receives commission?

When is sale recognised in an agency who...

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For VAT purposes, when is a sale recognised in this business? The business collects money, takes commission at source and then passes it on to the supplier. Due to credit facilities sometimes cash is passed on before it is received.

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By carnmores
19th Oct 2015 13:14

Depends on type of business

and what the contract say - it is unclear as you state that credit facilities are used - and what sort of billing arrangement is is place , self-billing?

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By SimonLever
19th Oct 2015 13:22

When the transaction takes place

As defined by .Gov.uk the sale is recognised when the transaction takes place.

I would say when your client becomes entitled to the fee for their services.

However to take things further it seems from what you are saying that your client may be exempt form VAT as they are providing a finacial service under Sch9 Group5 (1) of the VAT Act 1994.

I suggest you may wish to read VAT notice 701/49 for clarification (not that it is that clear!)

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By carnmores
19th Oct 2015 13:47

@simonlever

i rather thought that OP was asking about payments made in advance to the principal but its not absolutely clear i grant you 

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