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VAT on reimbursed expenses return?

Client is VAT registered Company A) and subcontracts to a company (Company B).

Company A is paid for labour and work + VAT from company B, no problems there. Company A also claims expenses incurred from company B, which they pay them, inclusive of VAT.

So on the VAT return, first one is due Jan 7th, is box 1 labour VAT PLUS VAT received from company B regarding expenses?

Apologies, I can't quite seem to get my head around this one.

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By SXGuy
06th Dec 2018 11:25

Company A expenses is kind of a double entry with the end result being any vat due to hmrc.

Company A purchase expense and vat in the usual boxes.

Then company A issues an invoice for expenses to company B so again net sales and vat in the usual boxes.

Company A reclaims vat on actual expense but declares vat on payment for those expenses. Difference if any would be vat due to hmrc.

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By AA90
06th Dec 2018 12:11

Thank you for your help and the prompt reply.

So to confirm, you are saying purchase net and VAT in box 4 and 7.

Then sales net and VAT in box 1 and 6, but add on the purchase net and VAT in box 1 and 6.

So total VAT due in box 5 is just VAT received on sales. but purchase VAT nets itself off the relevant boxes?

That helps, I see now. Thank you very much!

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By AA90
06th Dec 2018 21:31

Thanks for the quick reply! I understand now, that's a great help.

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