VAT on disbursements/ recharged expenses

VAT on disbursements/ recharged expenses

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My client has recharged his customer for his train travel.

Should he charge VAT on this?

Thank you

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By thomas
09th Jul 2012 14:37

PS I say yes, client says no

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By WhichTyler
09th Jul 2012 14:41

You are right

Any costs that your business incurs itself in the course of supplying goods or services to customers are not disbursements for VAT purposes. It's you, and not your customer, who purchases the goods or services, which are supplied to and used by your business.

 

http://www.hmrc.gov.uk/vat/managing/charging/disbursements.htm#1

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By spidersong
09th Jul 2012 15:22

What I tend to do...

...is ask the client if their customer enjoyed the train ride. When they point out that the customer didn't ride the train then this makes it quite easy to point out that what the customer is paying them for is not a train ticket therefore, but is instead further payment for the clients services (which will of course be subject to the same VAT as the rest of the service).

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