VAT on recharges

VAT on recharges

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Hi,

We've incurred some costs on behalf of another group company, who are in a different VAT registration. On the original invoice VAT wasn't a straight 20% on all parts.

When I recharge the group coy do I charge VAT on the whole amount I'm recharging, and is the amount I'm recharging the ex-VAT amount or including VAT amount?

(e.g. if original bill £100 + £10 VAT in total, am I now recharging £100 + 20% or am I recharging £110 + VAT)?

Thanks

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By spidersong
26th Oct 2012 14:06

VAT: The Devil's in the details

What are you recharging for?

Is the recharge part of a larger contract or other supply?

Have the goods or services been altered or part used before you pass them on?

Are you sharing costs or is this all their responsibility?

Why didn't they buy it direct?

Why wasn't VAT on all parts, is part of it exempt, zero rated, an export, secondhand goods etc.?

There is no special rule for recharges between different VAT registrations, there may be a possibility that it's a disbursement and you just pass it on as is, otherwise it's the same as any other supply we'd need to know what you're selling them in order to know whether you charge VAT.

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By Knight Rider
26th Oct 2012 15:30

Is the other group company UK VAT registered?

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By Astronaut
26th Oct 2012 19:27

Hi,

Recharging for some mobile telephone costs, fairly small amounts, £hundreds rather than £thousands. We have the contract with Vodafone, and gave phones to some of their workers. As I understand it VAT isn't charged on some international call services.

Yes, other coy is VAT registered, so overall it will be offsetting for group.

I haven't seen a bill yet, not sure if it will show a pre-VAT amount per user or a VAT inclusive amount. I'll be happier of its the former. But even if I get perfect information of the exact charge and VAT amount per user, am I just passing that charge though (i.e. able to charge the zero-rated parts as such) or am I billing them for a service and therefore pre-VAT amount plus standard rate VAT, because it's not me providing the telephones?

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