We are soon to employ a person in the company I manage the accounts for on a contractual basis. This employment is on behalf of another Company we work closely with. Every month I will recharge the following expenses to this company at cost;
Employer Mandatory Pension Contribution
Disbursements (travel and accomodation)
My question is, would VAT be applicable to the salary portion of the rebill and not to the other sections?
The expenses incurred by this employee is solely for the other company which is why I am recharging as disbursements and not 'recharges'.
Has anyone else dealt with a similar situation previously?