Member Since: 15th Oct 2019
30th Oct 2019
thank you Les
1. I need to seek specialist advice on that. The tip itself I understand is outside the scope of VAT. However as to our commission, some prior research I did suggests that our commission would be exempt if we were considered the payment processor, and not if not. We use a third party payment processing software platform behind the scenes to effect the payments, and though the process is fully controlled and executed by our app, it is possible we would not be considered a payment processor and therefore our commission may be standard-rated within the scope of VAT
2. backdating our registration for VAT would not have a material effect at the moment as we are just in the process of launching 'organically' so the amounts of money currently involved are tiny!
3. yes that is the question I am seeking to answer
4. In practical terms we cannot expect the recipient of the tip to manually issue an invoice to the payer, although technically we could do it at an automated level. Tip recipients though will not be VAT registered.
30th Oct 2019
thank you WhichTyler - unfortunately that is not an option. We have to deduct disbursements from the recipient's tip which if combined with the commission we charged the payer would cause sufficiently large deductions in the net amount being received by the recipient as to inhibit the adoption of our app.
16th Oct 2019
Dear WhichTyler, I am embarrassed to say this issue is not yet addressed in our terms and conditions and we do not yet have an accountant! Would you be very kind and advise what the treatment would be in both situations? thanks