I seem to be losing my mind on how to treat VAT on expenses that are recharged to the client on behalf of a supplier.
So we are basically an agency where we provide contractors to our customers. The contractors go to one of our clients and provide a service to them and they sometimes incur expenses, travel ect. The contractor charge us from there limited company for these expenses after receiving approval from our client . We then pay the invoice and recharge to the client. Do we charge total cost plus vat?
For example let's say the the expenses came to 10 plus VAT. Then the supplier charged £10 plus VAT. Would we charge the client £12.00 plus VAT as we are providing a service for them or do we charge exactly what we paid?
Any advice would be helpful.