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This issue may have no effect on your business's financial viability but to others it can have a very negative impact and only way to attain your target income means having to raise your rates which can put you into a situation where guests find your establishment too costly. Also the higher the rate the higher the final commission and VAT fees from B.Com so where is the medium?
Think of the smaller establishment which only caters for a small amount of guests but offer 5 star service and facilities.
Here is a challenge for Booking.com financial department in the way they conduct business in the sense of commission and now the new 2.1% payment fee. At present the system is unfair and unjust to the Host on the basis of the following:
Host sets their rate requirement inclusive of 15% commission and adds VAT
= Total payable by guest.
On receipt of payment B.Com take 15% of total as commission adds VAT on commission the commission with remainder going to Host but less 2.1% Payment handling and VAT due on the handling fee.
Remains go to Host but the host will never receive their required rate inclusive of VAT?
THIS IS FACT
Here is the proposal:
The host sets their rate which does not include VAT to B.Com:
B.Com adds 2.1% for payment handling, 15% for commission and finally VAT at what ever rate is applicable to the country Host is living in.
This total is now presented to the guest as the accommodation rate.
When payment is made to B.Com they will pay over to the host their rate inclusive of VAT chargeable to that total.
In this manner B.Comm receives their portion inclusive of VAT and the host receives their portion inclusive of VAT.
If any specials are offered the same format remains.
Hi Marion I agree with you relating to B.Com additional 2.1% fee for payments, this service was a part of their commission and has no justification in being implemented.
Looking at their interpretation of commission and Vat.
You calculate your rate at 100 of any currency to be financially viable.
Add Vat @ 15% x 100 = 15 added to rate = 115
Add B.Com 15% x 115 = 17.25 add Vat @ 15% = 2.60 total amount 134.85
B.Com does this 15% of total amount -20.23 add Vat @ 15% = -3.03
Total due to you = 111.59 subtract 2.1% payment fee = -2.34 add Vat @ 15% = -0.35
Total now paid = 108.90 of which you are liable to pay Vat 15% = -16.34
Earnings = 92.56
IS YOUR BUSINESS SOLVENT OR INSOLVENT
TIME TO MOVE TO NEW PASTURES
Hello Aaltjie, sorry cannot do as these documents are confidential but if you look at your documents received from B.com they must all balance in amounts. The resolution given to me was issue a valid tax invoice referencing Booking.com as recipient and not the guest, you do not take off the commission. Booking.com is not interested in receiving a copy of the invoice and at least you can balance your banking account income statement. How Booking.com balance their books at end of the day is their problem as long as authorities cannot proclaim money laundering I can live with it.
You have a valid point but this is b.com who actually are receiving payment upfront and have the luxury of transferring payment to an interest bearing investment account whilst you must wait until the 16th of the month after guests have left and receive no interest. Problem here is that if the advanced booking is only for a day or two and is cancelled by the guest you may have lost out on a guest looking for accommodation in excess of two days. This where b.com come in with their we are trying to find a guest to fill this period and payment is only guaranteed on the cancellation policy which is another kettle of fish.