I have a client who rents some offices and an invoice for surveying fees has been raised by the letting agent to my client.
The invoice quite clearly states 'surveying fees' but no VAT has been charged - although the company are VAT registered.
My client has now asked them why he hasn't been charged VAT and the letting agent has sent him a copy of an invoice from them to the landlord with VAT charged.
So my client's invoice is identical to the one the agent has sent the landlord but the one to the landlord has VAT charged, the one to my client does not - yet both are for the same gross amount.
I don't really understand this so wondered if anyone could help?
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Quick query?
So, you won't mind a quick answer?
My guess is that the letting agent has undertaken some surveying work for the landlord and so has invoiced him for surveying fees plus VAT, but under the terms of the lease, the cost is payable by the tenant, so the letting agent has sent your client a request for payment of the total amount inclusive of VAT, rather than a proper invoice.
@Euan MacLennan
... it sounds like that's exactly what's happened, thank you Euan, so my client is NOT entitled to claim any VAT on the recharged amount, is that correct?
Incidentally it does seem to be a 'proper' invoice, with invoice number and everything!
Who had the survey done and why?
This is VAT and so without a full background it's difficult to say what's happening, so we'd need to know who organised the survey and why, and what benefit everyone involved is deriving from it, who receives what from whom in the supply chain etc.
However I can have a (hopefully good) guess at the situation:
It sounds like the letting agent has treated it as a further (exempt) rental payment, which from a VAT point of view it probably is.
It's not uncommon with lettings for the tenant to meet the landlords legal, survey etc. costs when organising or renewing a lease. However the fact that someone's paying for something doesn't mean that it's actually supplied to them i.e you pay for the landlords legal fees, he's the one that gets the lawyers services, all the person paying for those services actually gets is a lease at the end of the day
So if the supply of the surveying services is to the landlord, then the VAT on the service wouldn't be your clients to incur and/or recover. Instead they have to look at what they're actually receiving from the landlord, and likely all they're actually receiving from the landlord is continuing occupation of his premises, which unless he's opted to tax is an exempt supply.
So the charge from the landlord is exempt, which probably means his costs are non-recoverable for VAT purposes, and so if he's recovering out of pocket expenses from the client (survey fees, legal costs etc.) then his expenses would be the full gross charge.
EDIT: basically what he said only longer!
@spidersong
... yes, just to clarify my client was leaving the property so I guess a survey was organised to make sure nothing was wrong before my client left, the copy of the original invoice to the landlord had VAT on, but the copy my client received today (for the same gross amount) has no VAT on... so it seems like that's right and my client can't claim the VAT?