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Expense claims from subcontractors

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I have a client in the film industry who receives invoices from subcontractors. These subcontractors incur expenses such as travel, parking etc.  Is it acceptable for the subcontractor to submit an invoice for the service supplies but then submit an 'Expense Claim' for the expenses so that the client can reclaim the Vat element on any Vat receipts, or must these expenses be included on the subcontractors invoice.  Is there any HMRC guidance that I can be directed to?

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26th May 2019 22:26

Depends.

But it's likely that the services have been supplied to the subcontractor (travel's a good example - who made the journey ?), not your client.

Reimbursement of the expenses form part of the subcontractor's fee.

It's a common error.

"Who is supplying what to whom ?" is the question you need to ask.

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26th May 2019 22:27

I had a festival client who acted in this manner, and have an events company who do.

Don’t think that that technically answers your question... but ....

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to atleastisoundknowledgable...
26th May 2019 22:29

Lion is correct though.

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26th May 2019 23:22

Of course your client can reclaim the VAT. It just needs the subcontractors to be VAT registered themselves.

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By AJ1
27th May 2019 11:27

The expenses can be added to main invoice attaching receipts if not vat registered to claim vat back.

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to AJ1
27th May 2019 11:32

How would that help?

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to AJ1
27th May 2019 12:21

AJ1 wrote:

The expenses can be added to main invoice attaching receipts if not vat registered to claim vat back.

Woah !! That's a very bold statement.

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to lionofludesch
27th May 2019 12:24

Is 'very bold' a euphemism for 'false'?

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to andy.partridge
27th May 2019 14:33

I was trying to avoid saying "Rubbish!"

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