In message , at 22:53:38 on Sun, 26
May 2019, JNugent remarked:
On 26/05/2019 18:21, Roland Perry wrote:
In message , at 11:56:16 on Sat, 25
May 2019, JNugent remarked:
On 24/05/2019 21:11, Roland Perry wrote:

JNugent remarked:

How Uber allocates their turnover is not relevant to the question
of what their turnover is.
*It is if the main way they "allocate" the funds is by sending 75%
to the* drivers (on a booking agency basis) and keeping 25% commission.

How?

They are still turning the money over, no matter how it is sliced up
after receipt.

It goes through their bank account. It is all part of the turnover.
That's what turnover *means*. They could pay the drivers 99% of the
turnover, but it's still turnover.
If you look at a company like TheTrainline, the turnover they quote
is just the commission from the Train Operators (and some fixed
transaction fees from customers) [in the region of £150 million], not
the total of all the fares people buy [in the region of £2 billion].

If it were otherwise, any small enterprise on the verge of the
compulsory VAT registration turnover quantum could, by sleight of
hand, deduct the amounts they are liable to pay out for wages (that's
the biggy), business rates, fuel duties and VAT, national insurance,
etc, and claim not to be turning over enough to be forced to register.
You are fatally confusing gross profit margin with turnover.

That is exactly what I am not doing.

Turnover is turnover. Profit, whether gross or net, is something other
than turnover and somewhat less in size.

Profit is not the deciding factor when it comes to VAT registration.
Only turnover counts.

The turnover for someone like Uber or TheTrainline being the commission
element, not including the money that passes straight through to the
drivers and Train Companies respectively.

Any business which pays out more than it previously did in wages
or overheads reduces profitability, but turnover only vchanges if
turnover changes.

*The only overhead that the Uber that's paying 75% to drivers (and
the* drivers paying all their costs like renting and insuring
vehicles,* paying themselves a wage etc) has, is running its booking


The amount of their overheads isn't important. The principle *is*.

If they want to avoid VAT liability on turnover, they need to let
the drivers collect the fares (like a real private hire operation)
and avoid making it part of their revenue.

I don't think credit card companies include the total value of things
purchased with their cards in their turnover. But they do collect the
money from buyers, deduct a commission, they pay the balance to
vendors. And like no doubt Uber, they don't pay the whole amount out
and then send an invoice asking for the commission back whenever the
trader feels like it.

I don't now about you, but I pay money to my credit card issuers.

That's what I wrote. They collect the money you pay to them, and channel
it through to the merchants.

They don't pay money to me.

I didn't suggest they did. They pay money to merchants. But that's money
from you to the merchant, and isn't part of the card issuer's turnover.

They pay out money *for* me,

Just like Uber pays money *for* the passengers, to the drivers (well,
that's the accounting model we are exploring).

but really, it's about as bad an analogy as you could have chosen. The
relationship structure is completely different from that of Uber. In
order to get it to look similar, you'd have to posit the credit card
issuer getting my income paid into their bank account instead of mine
and then letting me have some, but not all, of it.

I's not about the flow at your end, but at the driver's end.

Yes, the card issuer pays money it has derived from you, into the
merchant's bank account, while deducting a small commission (my
financial model here is that they don't pay it all up front, and then
expect the merchant to pay them back the commission later).
--
Roland Perry