Morning
Our firm cross hires plant and one of the machines was destroyed - caused by the firm we hire to (Company A).
Everything has been dealt with except for the excess, which the Company A needs to pay to the firm we hire from (Company B).
However, Comapny A does not have Company B set up on their system so won't pay Company B. For some reason our MD has offered Company A to pay us, which we then recharge to Company B.
I know that insurance is exempt, but would we be right in adding VAT in our invoice to Company A as we are providing a service as opposed to paying any insurance excess, or as the entire transaction (Company A > Us > Company B) relates to the insurance should it all be VAT exempt?
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Replies (3)
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If you are cross hiring then there are two contracts - one between you and company B, and one between you and company A. There is no direct relationship between Company A and Company B, so this is the correct way to process.
I would have assumed that Company A have received an invoice from you for the cost of the destroyed equipment plus VAT, and you have received an invoice from Company B for the same plus VAT?
If you are cross hiring then there are two contracts - one between you and company B, and one between you and company A. There is no direct relationship between Company A and Company B, so this is the correct way to process.
I would have assumed that Company A have received an invoice from you for the cost of the destroyed equipment plus VAT, and you have received an invoice from Company B for the same plus VAT?
Yes - this is all about who is supplying what to whom (WISWTW). There are indeed two separate contracts.
So far as I can see, there are no supplies of anything here. A is compensating you (OP) for your loss and you are compensating B for theirs.
You say you're providing a service. What service do you think you're providing?
“Company A does not have Company B set up on their system so will not pay”
Must try that one!