Help validating a taxation argument

BlackWizard

Hi folks,

I'm working for a start-up company and I've landed myself into a discussion on how taxation rules work when acting as a marketplace.

My companies product is similar to Hailo/Ebay. We act as a controlled marketplace to allow one person to sell a service to another person.

It gets difficult when you consider the following

1. Our customers will pay us cash to topup their accounts with Points which are then spent on the website to do something like Chat e.g. 100 points to send someone a message
2. We then have to collect the suppliers points and when they reach a threshold, transfer to their account the real currency equivalent.
3. If the service is something like a go carting experience with the supplier then we will want to bypass points and take the customers cash and hold it until the the service has happened.

In all cases above I thought it would be up to the supplier to charge sales tax? So my company just pays the relevant company taxes on the amount less suppliers cut.

But someone else has suggested that we should pay VAT for the online services and the offline services.

What do you think? I really really appreciate any thoughts you have on this. I feel like it's a bit of a grey area but I hope someone here could shed some light on the matter.

BlackWizard

Damn.. was kinda thinking it was easy