Global Shipping Program & Turnover?

Gen2k1

For business sellers on Ebay, when putting together our tax returns, I'm aware we have to include the postage costs we charge in our turnover figures - but can anyone say how this should work for items sold through the Global Shipping Program? Ebay charges the buyer whatever postage cost we set, but they also charge the buyer an additional postage cost to a 'third party delivery provider' (Pitney Bowes) - an amount that is not made easily accessible to the seller. Is this additional charge part of the seller's turnover too, or something separate?

soolin

Gen2k1 wrote: »

For business sellers on Ebay, when putting together our tax returns, I'm aware we have to include the postage costs we charge in our turnover figures - but can anyone say how this should work for items sold through the Global Shipping Program? Ebay charges the buyer whatever postage cost we set, but they also charge the buyer an additional postage cost to a 'third party delivery provider' (Pitney Bowes) - an amount that is not made easily accessible to the seller. Is this additional charge part of the seller's turnover too, or something separate?

Surely the answer is simple. Your income is what you receive, not what others are paying on your behalf. You are not responsible for the expenses of others.

So if I sell something for £10 with £3 UK postage which goes to the GSP, I have received £13, the rest is immaterial.

Gen2k1

In the case of the Global Shipping Program, it appears that the buyer pays two different entities: They pay the seller for the product and for domestic postage, but they also pay Pitney Bowes for their international shipping/handling service. The money that is paid to Pitney Bowes is never received by the seller, but goes directly to the third party courier. So does that mean that additional money is not turnover?

soolin

Gen2k1 wrote: »

In the case of the Global Shipping Program, it appears that the buyer pays two different entities: They pay the seller for the product and for domestic postage, but they also pay Pitney Bowes for their international shipping/handling service. The money that is paid to Pitney Bowes is never received by the seller, but goes directly to the third party courier. So does that mean that additional money is not turnover?

As above I cannot see how money paid to acompletely different entity could in any way be considered turnover for an un connected party.

If you are struggling with accounts and especially as the deadline is looming to submit might it be worth approaching an accountant, it might be cheaper in the long run to have someone assist this year rather than make errors.

Also, hopefully you are already registered to submit online as in previous years getting the online access was slow for some people with codes being sent by snail mail. You do not want to miss the submission date.

Gen2k1

Oh ok - so your view is that it wouldn't be turnover. When you said "your income [turnover] is what you receive", and then that someone would have received £13 even when £3 of that went the GSP, it seemed as though you were saying the GSP money had been received and was therefore turnover.

My worry is that, when you print off an invoice for the buyer using Ebay's system, the amount paid to the GSP is included on the invoice, as though it is a part of the transaction between you and the buyer. Admittedly it says on the invoice 'Paid to seller' and then in a separate section 'Paid to third-party delivery provider', but it seems odd that it should appear on my invoice to the buyer at all. Rather, it seems the third party payment should be on a separate invoice to the buyer provided by Pitney Bowes.

soolin

Gen2k1 wrote: »

Oh ok - so your view is that it wouldn't be turnover. When you said "your income [turnover] is what you receive", and then that someone would have received £13 even when £3 of that went the GSP, it seemed as though you were saying the GSP money had been received and was therefore turnover.

My worry is that, when you print off an invoice for the buyer using Ebay's system, the amount paid to the GSP is included on the invoice, as though it is a part of the transaction between you and the buyer. Admittedly it says on the invoice 'Paid to seller' and then in a separate section 'Paid to third-party delivery provider', but it seems odd that it should appear on my invoice to the buyer at all. Rather, it seems the third party payment should be on a separate invoice to the buyer provided by Pitney Bowes.

You've lost me now and I think you need an accountant.

You received £13 (in my example) , the invoice that buyer gets is immaterial , HMRC won't see that anyway unless your accounts are prepared in a very strange manner.

Gen2k1

In your example I receive £13, £3 of which you specified as going to the GSP. The money that goes to the GSP is the money that is at issue here.

This_Year

Gen2k1 wrote: »

In your example I receive £13, £3 of which you specified as going to the GSP. The money that goes to the GSP is the money that is at issue here.

I suspect that you've misunderstood Soolin's example.
Her item is £10 + £3 UK postage. Someone overseas buys it so it goes via GSP and so what the buyer pays on top of the £3 UK postage is irrelevant for your turnover.

I really also recommend that you take advice on this!

Gen2k1

Yes, I think I misread it. I read it as "£3 goes to GSP". Anyway, I think the take home is that the GSP money isn't my turnover. What's confused me about it is the way Ebay presents the GSP to the buyer on my behalf. For example, if you use Ebay's automatic invoice generation system for an item purchased with GSP, my name/business details will be the only ones that appear on the invoice, but both the payment to me and the payment to the GSP will be included. And on my listings, the only business details that appear are mine, even though, in the case where GSP is being offered, the shipping agent is also selling a product (and therefore should list their business details too?)

martindow

I think you are still over-complicating it. If you were sending something to the buyer, using soolin's figures you would receive £13 which is part of your turnover. £3 postage is part of your expenses along with Ebay/Paypal fees and any other costs involved in running your business.


If it is a GSP sale the postage is still £3 to sending it to the GSP centre and the figures are exactly the same as for delivering directly to the customer. How Ebay deals with it from then on and who they charge a fee is immaterial as it is not a cost to your business.