UK What is my turnover?

[JackB1221]

Hi,

I have had a few divided opinions on the below:

I am currently in the process of setting up a marketing agency. Basically how the company will work is businesses will pay us to provide them with marketing services and then we will pass their details and a proportion of the payment onto one of our freelance marketers, as an example:

A business spends £1,000 on a marketing service. The freelancer then receives £800 and we keep £200 for generating the sale.

The freelancers effectively acts as a separate company and will therefore pay their own tax, etc.

Will our turnover for this sale be £1000 and the £800 cost of sale OR is our turnover £200?

Thanks in advance!

Jack

 

[Werner Reisacher]

Who is the legal entity that enters into the contractual agreement of 1000? If something would go wrong in the process, which party carries the primary responsibility towards the customer. If you are controlling the entire business transaction, collect the funds from the customer, and merely use "contactors/freelancers" to assist you in fulfilling your contract, then you are the contractual party in the deal and have to recognize the full contractual value (1ooo) as revenue.