IEIM901741 - Fees, Commission and Taxes Withheld
Reporting Platform Operators (RPOs) are required to report the total Consideration paid or credited to the Seller after the deduction of any fees, commissions and taxes withheld, which should be noted and reported separately.
When determining fees, commissions and taxes withheld, RPOs should include those that are closely related to the facilitation of the listing, booking and the provision of the Relevant Activity.
There may be circumstances in which RPOs provide additional services relating to the ongoing management of the business. RPOs must distinguish between a “fee”, which may be deducted from the Consideration, and a general expense of the Seller’s business, which should not be deducted.
Example
Platform A is a property rental Platform. They list a property on their Platform, process the booking and facilitate the Relevant Activity.
A Seller earns £3,000 for property rentals in the first quarter of the calendar year.
Platform A charges a monthly fee of £10 to allow the Seller to list their property on the website. Platform A charges 20% commission to any bookings. Platform A is VAT registered.
Platform A also carries out general maintenance and cleaning of the property. Platform A charges the Seller £500 quarterly for this service.
The fee for the quarter is £30. The VAT added to this at 20% is £6.
The commission is £600. The VAT added to this at 20% is £120. For the purposes of these reports, and for completion of the XML schema, commission is considered a "fee".
The total VAT charged is £126.
The amounts to be reported will be as follows:
| Consideration | £2,244 (net of fees, commission and taxes) |
| Fees | £630 (the amount for fees and commission combined) |
| Taxes | £126 |
The amounts charged for property maintenance are not related to the listing, booking or facilitation of the Relevant Activity. They are instead ongoing expenses of the property. As such, they should not form part of the reporting.