Hi,
I am looking for some Tax advice. I wish to set up a Ltd company providing an entertainment hire service. I will have clients book services via myself for their event and have the option to pay off the fee monthly. Then I pay the supplied entertainer at the time of the event minus my commission - 10% for example.
How do I declare this on the tax return as for example the client may pay their entire balance in 2019 but the event may not be until 2021 when the entertainer would be paid for example. The money paid to the business by the client is not all profit - only 10%, with the rest going to the entertainer at the time of the event which may be a year later (or longer).
With weddings for example most people book a year or 2 in advance. My fear is I have to pay tax on all money received in the first year even though that money is not business profit, only 10% is profit but I still may have to pay tax on it. Then when it comes to paying the supplier/entertainer at the time of the event I am at a loss as I have had to pay tax on the full amount.
How would I record this income without having to pay tax on the 90% that will be paid out of the business again in the next tax year.
Please advise how this scenario would work
Thank you
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