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VAT Flat Rate Scheme and Disbursements

VAT Flat Rate Scheme and Disbursements

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I have a 'brain freeze' at the moment and need advice so would appreciate any help.

A client is on VAT Flat Rate scheme. He is invoicing his fees + VAT and adding grossĀ disbursements on which VAT is not charged. For the calculation of the flat rate VAT, is the gross turnover the fee + VAT or is it the fee + VAT + disbursements?

Thanks in advance for any assistance

Replies (3)

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By lionofludesch
26th Aug 2015 17:29

Too vague - it depends

If they're genuine disbursements for goods or services provided to the customer and your client simply acts as agent passes on the cost to his customer, they're not sales.

But if they're his out of pocket expenses, rail fares, hotel bills for example, they're part of the price of his sales and are chargeable to VAT.

More detail on your question will get you more detail on my answer.

Thanks (1)
26th Aug 2015 21:25

Thanks for the response. The disbursements on which VAT is not being charged are genuine disbursements. I was not sure if they were part of the flat rate calculation so thanks for clarifying.

Thanks (0)
By Paul Scholes
26th Aug 2015 21:34

Bottom of section 6.4 of Notice 733

In case you need to quote anything.

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