Hi can anybody advise on the best way to treat payzone transactions they are currently included on z read as sales but I suspect that they should be taken out of sales and not included in the vat return, when payzone take there money from bank the cost is currently posted to cost of sales but I suspect that again this should not be included on the vat return, I am thinking commission is the only element that should go through p&l and perhaps the other transactions should be balance sheet only as they should cancel each other out? any advice welcome
Thanks
Hi Genevive magnus hudson,
I'm not very familiar with Payzone but it sounds like it is a way for retail shops to accept bill payments from customers on behalf of their customer's suppliers (such as electricity and gas suppliers). In that case I think you should create a new liability account called 'Money Owed To Payzone'. There are then three types of related transactions:
When someone gives you money to pay their electricity bill, record a Money Received transaction deposited into the 'Money To Be Banked' account from the 'Money Owed To Payzone' account. Set the VAT Treatment on this payment to 'Out of Scope'.
To record your commission, create a Money Received transaction from the Sales Income account (or some other income account) to the Money Owed To Payzone account. I suspect the VAT rate on this transaction should be 0% because financial services are exempt from VAT, but please check this with HMRC.
When you forward the payment to Payzone (less the commission) create a Money Paid Out transaction from the Cheque Account to the Money Owed To Payzone account. The VAT Treatment should be 'Out of Scope'
Regards
