Hello and welcome to the site. Thank you for your question.In general financial services are exempt from VAT.As I see it you are acting as a cash handling agent on behalf of your client and on receipt of money from the customer, you deposit the funds into your business account and then pay your client the amount less your commission charge.You are responsible for VAT applicable to the charge for service provided and not the whole amount you received in the first instant.If I were you, I would maintain a separate business bank account designated as client account so that you can separate it from your own funds.It would be preferable if you were to ask your clients the sellers to sign up to a online payment service and that the monies went straight to them rather than via your business. You would raise an invoice for commission and charge VAT on that commission.
I hope this is helpful and answers your question.
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Peter, thank you for your reply.My rationale for recommending that you get the sellers to sign for online payment service is -It is such simpler if you did not have to separate your turnover from monies received that are not your business income. Less explanation to provide in the event of an enquiry from different sections of HMRC.As a start up business you could handle this with ease but as the business grows and flow of money increases, you may need additional resource to support this service.It is possible to provide the service provided you have a proper audit trail.. all these tasks require time and effort and have a monetary value attached to them.I maintain a separate client's account for monies I receive on behalf of my clients but I am required to do that for professional reasons.You don't have to maintain a rigid discipline of separating monies coming into your business account.If you feel that you would rather offer this service now, then you should review it regularly once your business grows.I hope this is helpful.