A consultant operates as a VAT registered limited company. In addition to the fee, a client also pays the consultant a per diem allowance and reimburses other expenses (travel, accommodation). Should the consultant be adding VAT to the expenses and per diem allowances?
Any comments gratefully received.
Paul
Paul Drohan
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Yes
These are outputs of the business and/or expenses incurred on the client's behalf. VAT applies, even to items such as train fares where VAT has not been suffered.