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Claiming input VAT on expenses paid by sub-contractors

Hi All,

My client hires several sub-contractors to go out and buy products for the business which it then sells. The sub-contractors are self employed and are not registered for VAT.

The sub-contractors use their own debit/ credit cards to pay for the items and get a VAT receipt. The client then reimburses the sub-contractors based on these receipts.  My question is whether we can claim the input VAT on the receipts provided by the sub-contractors? 

I understand that if an employee incurs any VAT cost, that can be recovered by the employer as the employee is acting as an agent. I believe the sub-contractor is also acting as an agent and that the items are being used in the main business of the company and therefore theoretically should be able to recover the input VAT .

I would welcome any comments and suggestions.

Many thanks,

Sarah

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By pawncob
12th Mar 2012 22:32

No

Read the rules for a valid VAT invoice.

http://www.hmrc.gov.uk/vat/managing/charging/vat-invoices.htm 

 

If the invoices are made out to his business, then the subbies are acting as real agents and the VAT could be recovered.

Thanks (2)
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16th Mar 2012 11:24

Thanks

Thank you so much for your help.

One question I have is that when an employee incurs an expense, the invoice will not have the business name. Does this mean the business cannot claim the input VAT on such invoices?

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19th Mar 2012 13:06

Thanks again

Many thanks again. It's clear now.

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