I have a client who has a limited company which he operates Flat Rate Scheme for VAT. For one of his projects he has to work away and has been provided with accomodation, car and a daily allowance for food etc he will claim his expenses back on a monthly basis.
My issue is, how would he do this. He would put his works invoice in, would he add the net expenses on this leaving a subtotal to add VAT? if this is the case my client is paying vat on the expense money received through the flat rate scheme.
Or is there another way to do it?
I am just thinking if he recieves monies for expenses this would be put down as sales income and the expenses that he has suffered will not be allowable for deduction of VAT as he is on FRS.
Advice will be greatly appreciated