I'm a bit confused and could really do with some help as there seems to be contradiciting info on this.
If a company sells goods on Ebay and they specify a postage amount of say £1.30 is that £1.30 classed and accounted for as part of the sale or should it be separated to postage/carriage?
According to HMRC if you are VAT registered then you pay the VAT on the total cost of the sale (including the postage) so that suggests that it is part of the turnover. If you use the batch invoice process in Sage you can't separate the postage but if you produce a customer invoice then there is the facility to separate the postal charge and allocate it to a different nominal code.
My client has more than 200 sales a day so splitting it all would be a nighmare.
If you think about that from HMRC's perspective how many times have you seen something on Ebay where the price is something like 10p but the delivery charge is £8.
Businesses are simply applying a minimum cost to items by applying it as a postage cost where the reality is that its not.
So, the result is that postage paid by the purchaser is part of the sale.
The real postage costs associated with sales will be shown as a cost of sale unlike general postage costs which are an overhead.
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
