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Correct sales value

Deduction of commission by middleman

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I place a bid for work through a freelance website for £500.

I win the work and perform the work.

The freelance website invoices the end customer £500. Then pays me £460 after deducting their commission fee £40.

Should I treat the sale as £500 and then account for the deduction of commission from the sales invoice.

Or should the sales invoice just be raised to the freelancer for £460?

 

Replies (6)

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RLI
By lionofludesch
13th Mar 2018 16:57

I vote Option One.

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paddle steamer
By DJKL
13th Mar 2018 17:07

Who do you enter into a contract with re the work, the website or the end user?

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Replying to DJKL:
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By Daniel Anderton
13th Mar 2018 20:37

The contract is through the freelance middleman website.

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Replying to Daniel Anderton:
ALISK
By atleastisoundknowledgable...
13th Mar 2018 20:53

That doesn’t answer the question ... is the work done ‘for’ the website, who then sell that service to the customer, or do you do your work direct for the end customer? If you don’t finish the job, or do a bad job and the customer wants to sue someone, what happens?

I suspect you are contracting with the end-customer, in which case the income is £500, with a £40 cost for commission.

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Replying to Daniel Anderton:
ALISK
By atleastisoundknowledgable...
13th Mar 2018 20:57

That doesn’t answer the question ...

Essentially, does the website say “Customer X, meet Daniel; Daniel, meet Customer X. Please speak to each other about whatever it is the X wants doing”.

If so, (and as I probably think is the case) you are contracting with the end-customer, in which case the income is £500, with a £40 cost for commission.

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Replying to atleastisoundknowledgable...:
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By Daniel Anderton
14th Mar 2018 08:41

Yes, this is what happens.

Thank you

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