When categorising payments received from card providers like Stripe or CardNet, where shipping fees and commissions are deducted at the source, it's important to accurately allocate each component. Below is a step-by-step guide on how to categorise such payments effectively:
Example:
- Cardnet Customer Bulk Payment Transaction Received in Bank Account: £462.75 @ 20% VAT.
- Value of actual Customer Sales: £456.17 @20% VAT
- Shipping charges paid by customer: £20.00 @ 20% VAT.
- Merchant Bank fees and commission of 2.9%: £13.42
-
VAT owed: £77.12
Identifying the Payment:
- Locate the payment received from the card provider in your Bank Transactions.
Entering Customer Details:
- If the payment is a bulk payment from multiple customers, either use 'Cardnet' or 'MISC CUSTOMER' as the customer name.
- Alternatively, press the 'split customer' button to enter individual customer names.
Categorising the Payment:
- Enter the appropriate category for the payment, such as 'Sales - Product' or 'Sales - Service'.
- Specify the VAT % applicable to the products or services sold.
Splitting Categories:
- Select 'Split Category/VAT' to allocate separate categories for shipping or delivery charges, if applicable.
- Apply the relevant VAT % to these charges.
Adjusting Sales Price:
- Deduct the shipping or delivery fee from the gross price of the products/services sold.
- Manually enter the reduced amount into the gross sales price field.
Adding Merchant Account Fees:
- Press 'Split supplier' to include the merchant account fees/commission deducted from the source payment.
- Enter supplier information for the merchant bank (e.g., Stripe or CardNet) and select the category as 'Merchant Account Fees'.
- Input the amount of the fees and apply the correct VAT %.
Finalising Details:
- Optionally, press 'Justify' to attach the VAT receipt for documentation purposes.
- Click 'Done' to save the changes.
Confirming the Transaction:
- Select 'Confirm' to finalise the categorisation process.
By following these steps, you can accurately categorise payments received from card providers with deductions for shipping fees and commissions. Proper allocation of each component ensures transparent record-keeping and compliance with tax regulations. Additionally, your VAT return will reflect the expected amounts based on the categorised transactions.