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VAT query

I have a query with an invoice that has been raised to a company for monthly rent with VAT.

Dismbursements are due back for cleaning and rates (neither of which are vatable supplies)

Should these be deducted off the net value of the rent or the gross value ? 


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They are an allowance for costs not a reduction in the rent

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Thank you Cloudcounter.

However, the company who has raised the rent invoice has stated that they are reducing the total invoice by the cleaning/rates costs incurred.

In this case what should happen to the vat element  ie is the reduction off the rent net cost and thus reducing the total net value of the invoice itself ?

I would think this is the case but they are saying no - as it leaves them with a -ive figure !

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The company is correct to deduct the expenses from the gross

Why should expenses be deducted from the net?

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I presume there are two ways of looking at and the company has to come clean on why it is seeking a reimbursement of the costs incurred...


1) it is a reimbursement of expenses and thus not a reduction in the rent - hence VAT would be applied to the actual rent amount and not after expenses deducted


2) it is a 'reduction in the rent' and would then be reducing the net value of the rent


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Reduction in rent?

Why could it be a reduction in rent?

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