Sales invoices and Travel

Sales invoices and Travel

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I have noted that a client has not charged VAT on travel. The scenario is that his staff visited the client and agreed the amount to be charged for travel. When an invoice was raised the work done had VAT added to it but not the travel.   Paragraph      I told him that travel can never be on behalf of the client as far as VAT is concerned and must be charged.  Paragraph    I would feel happier if I could quote a cast-iron reference to him. Can you tell me what this would be please?

Replies (12)

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By mrme89
07th May 2013 09:59

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I think your client is getting confused with public transport which is vat exempt. However, when you charge a client you must charge vat for this. The following link may help

 

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

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By shaun king
07th May 2013 10:36

Pedantic

The link explains the situation re disbursements but in your instance the cost of travel is subsumed into the principal supply and VAT is charged accordingly. However, travel on public transport is Zero rated - not Exempt!!

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By mrme89
07th May 2013 10:44

@ Shaun King -  you are

@ Shaun King -  you are correct that it is in fact zero rated - Monday morning syndrome has struck me.

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By spidersong
07th May 2013 11:03

@mrme89

And struck you quite badly, since it's over 24hrs from the time Monday morning syndrome hits :)

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By mrme89
07th May 2013 11:11

.

It was a long weekend! It’s my 24th tomorrow and it was a warm up session for the weekend to come :)

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RLI
By lionofludesch
07th May 2013 12:37

Flat Rate

The price of the supply to the customer is the fee charged plus any expenses.  Rail fares (or other zero rated fares) are supplied to the trader, not the customer so when the cost is charged on, it becomes standard rated.  This is great if you use flat rate, as the trader gets to keep part of the VAT.

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By Moonbeam
07th May 2013 16:29

Thank you

I have sent a copy of the HMRC page to client who says he finds it confusing! At least I am clear.

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RLI
By lionofludesch
07th May 2013 16:58

Give him an example

Say he wants £100 for his work and his expenses are £10, then his fee to the client is £110 - plus VAT at 20 % or £22.

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By Moonbeam
07th May 2013 17:21

That's not the problem!

Client is highly intelligent in other areas, but finds HMRC dense wording extremely offputting. What he means by "confusing" is the reasons given for why he must charge VAT. Another problem he has, in my humble opinion, is that the whole subject is mind bogglingly tedious, and it's difficult for him to apply his mind to something so nitpicking. 

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By shaun king
08th May 2013 10:59

The easiest answer to his question is what is he being paid by his client - answer £110 to which VAT is applied. He can't do his job unless he travels to the client so that is part of the cost of him doing the work.

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RLI
By lionofludesch
08th May 2013 21:14

He could please himself

..... and not charge VAT.  Then he could get an assessment at his next VAT visit.  Up to him really.

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By Moonbeam
09th May 2013 09:04

No, it's up to me - as usual

I've pointed out that as I have noticed this problem (and it just affects a handful of invoices, and the client is VAT registered) he must remedy the situation on his next VAT return, or I will have to resign etc.

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