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I have been reading lots of threads on here but something I am still unsure of. I am looking at potential income for my business....
I work in the fitness industry running my own group training programmes and I am looking to expand by initially training a few instructors and taking them though my system, all with a 50% profit split, so all fitness clients pay online through our website and then I pay the instructor half of the money from their group (minus the cost of the payment transaction fees) and we pay half each for anything we need for equipment.
My question is...because I am paying them half, for every £2k income they get £1k. When we reach the VAT threshold for total income, would I have to pay VAT am only actually retaining half of it e.g. £80k income in a year but I keep £40k...would I pay vat/tax on the 40k or on the whole 80?
My thoughts is that I pay vat on it all but only tax on MY profit as its classed as expenses because technically I am paying the instructor for their time?
Any thought would be great, just so I have an idea for the numbers.
I work in the fitness industry running my own group training programmes and I am looking to expand by initially training a few instructors and taking them though my system, all with a 50% profit split, so all fitness clients pay online through our website and then I pay the instructor half of the money from their group (minus the cost of the payment transaction fees) and we pay half each for anything we need for equipment.
My question is...because I am paying them half, for every £2k income they get £1k. When we reach the VAT threshold for total income, would I have to pay VAT am only actually retaining half of it e.g. £80k income in a year but I keep £40k...would I pay vat/tax on the 40k or on the whole 80?
My thoughts is that I pay vat on it all but only tax on MY profit as its classed as expenses because technically I am paying the instructor for their time?
Any thought would be great, just so I have an idea for the numbers.