This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Tax For Marketplace Owners

FoodOS
Posts:1
Joined:Wed Oct 28, 2020 7:34 pm
Tax For Marketplace Owners

Postby FoodOS » Thu Aug 24, 2023 4:03 pm

Hi All

There’s quite a bit of info available for if someone or a company sells items via a marketplace such as Etsy, Amazon etc.

However little information available about the tax rules for the market place itself.

I have a food marketplace. Restaurants sign up to list their food items with us.

The end user places an order which the restaurant then cooks and delivers etc. Essentially like JustEat.

The money however comes to us as the marketplace. We take a small commission. Then pass the rest of the money to the restaurants on a weekly basis.

For tax purposes I believe our income is only the “commission” element we keep. Is this correct?

If so, the commission we collect is not near the the VAT threshold either.

TIA

Incredulum
Posts:2795
Joined:Thu Dec 03, 2009 5:35 pm

Re: Tax For Marketplace Owners

Postby Incredulum » Fri Aug 25, 2023 9:14 pm

Correct - provided you are acting as agent for the restaurant and charge them commission; rather than buying-in their stuff.

As an agent you are required by law to disclose to your principal the amount of commission you are receiving. This also allows them (if they are VAT registered) to compute the VAT they have to charge, as they have to account for VAT on your commission too. If you're not VAT registered it costs your VAT-registered restaurants more than if you are VAT registered. (Assuming you wouldn't increase what you charge by the VAT amount.)

https://www.gov.uk/hmrc-internal-manuals/vat-valuation/vatval11700

mitchellwilliam912
Posts:12
Joined:Thu Sep 21, 2023 1:36 pm
Contact:

Re: Tax For Marketplace Owners

Postby mitchellwilliam912 » Thu Oct 05, 2023 1:32 pm

You are correct in thinking that the tax rules for marketplaces can be a bit complex, but it's important to ensure you are in compliance with the tax regulations in your jurisdiction. I'm not a tax expert, but I can offer some general information that may help you understand the tax implications for your food marketplace.

In many jurisdictions, the income earned by a marketplace like yours is typically based on the commission or fees you collect from the transactions between restaurants and customers. This is the income you should report for tax purposes. The amount that goes to the restaurants is not considered your income; it's simply the revenue that you're facilitating for them.

Regarding VAT (Value Added Tax) thresholds, it's essential to be aware of the specific rules and rates in your country or region. In some places, businesses are required to register for VAT once they exceed a certain annual turnover threshold. If your commission income does not reach this threshold, you may not need to charge VAT on your services. However, this can vary greatly depending on where your marketplace operates, so it's crucial to consult with a tax professional or accountant who specializes in your area's tax laws to get precise advice.

Additionally, tax laws and regulations can change over time, so it's essential to stay updated and consider seeking professional advice to ensure that you're meeting all your tax obligations. Tax authorities often have specific guidelines for online marketplaces, so reaching out to them or consulting with a tax expert who is familiar with your industry can help you navigate the tax landscape more effectively.

Please keep in mind that this is general information, and it's always best to consult with a qualified tax professional who can provide personalized guidance based on your specific situation and location. They will be able to provide you with accurate advice tailored to your food marketplace business.

someone
Posts:686
Joined:Mon Feb 13, 2017 10:09 am

Re: Tax For Marketplace Owners

Postby someone » Thu Oct 05, 2023 3:35 pm

You are correct in thinking that the tax rules for marketplaces can be a bit complex, but it's important to ensure you are in compliance with the tax regulations in your jurisdiction. I'm not a tax expert, but I can offer some general information that may help you understand the tax implications for your food marketplace.

In many jurisdictions, the income earned by a marketplace like yours is typically based on the commission or fees you collect from the transactions between restaurants and customers. This is the income you should report for tax purposes. The amount that goes to the restaurants is not considered your income; it's simply the revenue that you're facilitating for them.

Regarding VAT (Value Added Tax) thresholds, it's essential to be aware of the specific rules and rates in your country or region. In some places, businesses are required to register for VAT once they exceed a certain annual turnover threshold. If your commission income does not reach this threshold, you may not need to charge VAT on your services. However, this can vary greatly depending on where your marketplace operates, so it's crucial to consult with a tax professional or accountant who specializes in your area's tax laws to get precise advice.

Additionally, tax laws and regulations can change over time, so it's essential to stay updated and consider seeking professional advice to ensure that you're meeting all your tax obligations. Tax authorities often have specific guidelines for online marketplaces, so reaching out to them or consulting with a tax expert who is familiar with your industry can help you navigate the tax landscape more effectively.

Please keep in mind that this is general information, and it's always best to consult with a qualified tax professional who can provide personalized guidance based on your specific situation and location. They will be able to provide you with accurate advice tailored to your food marketplace business.
This looks like something chatgpt would write.

darthblingbling
Posts:698
Joined:Wed Aug 02, 2017 9:09 pm

Re: Tax For Marketplace Owners

Postby darthblingbling » Thu Oct 05, 2023 5:32 pm

I think our jobs are safe for now

Lambs
Posts:1610
Joined:Wed Aug 06, 2008 3:15 pm

Re: Tax For Marketplace Owners

Postby Lambs » Fri Oct 06, 2023 10:38 am

Oh, you don't see the half of it.


Return to “Company Taxation”