Output VAT on recharged expenses to an overseas client(non EU)

Output VAT on recharged expenses to an overseas...

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Limited Company has a contract for the supply of services for a period of time at a day rate plus any travel expenses incurred.  Client is USA based, B2B general rule applies and supply of services is outside scope and no output VAT should be charged on the invoices.  I know, ordinarily, recharged expenses would have a VAT charge if in the UK. However,I cannot find anywhere if this is still the case for an overseas, non EU client.  It seems odd to not charge VAT on services but to charge VAT on the recharge on expenses.  Hope somebody can enlighten me as I am in information overload at the moment from scouring the HMRC website and was on hold for .20 mins on helpline before I gave up in frustration.

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chips_at_mattersey
By Les Howard
07th Sep 2013 10:54

Supply of services includes expenses

I would expect that, since the contract is for daily rate plus expenses, that VAT has to be applied consistently. There is a single supply of your services, not a separate supply of expenses. So, the whole single supply is outside the scope of UK VAT.

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Replying to mrme89:
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By KLW
11th Sep 2013 15:00

Thanks for the response.  I

Thanks for the response.  I did eventually manage to speak to HMRC on Monday and their technical department did confirm that the recharged expenses should follow the same treatment as the services and therefore will also be outside the scope of UK VAT.

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