VAT on Supplier Invoice for Reclaimed Expenses

VAT on Supplier Invoice for Reclaimed Expenses

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Hi

Can anybody clarify for me, if a supplier is a VAT registered consultant who delivers training on behalf  of my company and they for example want to reclaim hotel costs incurred whilst delivering training,  when they invoice us, if the hotel cost £100 + £20 VAT, should the invoice be £100 Net of VAT, then add 20% VAT at the end or £120 Plus a further 20% VAT?

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By DJKL
07th Nov 2019 17:18

Unless you are happy with their mark up or there is some reason they cannot reclaim the £20 input tax they paid, it is £100 plus £20 vat they ought to charge to you.

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By spidersong
08th Nov 2019 09:28

DJKL's response tells you what you should consider when looking at agreeing the basis or expenses/recharges when entering into an agreement. And for that situation is spot on if they can recover then there's no real reason they shouldn't charge net and then add the VAT on as part of their VAT charge so they're not out of pocket.

However what I'd say here is this looks to be an engagement already in place so the above may not be what you need to consider here.

What you'll need to look at is the contract that has been agreed, if it says they can recharge expenses at gross plus VAT then you've agreed to giving them a 20% profit on their expenses. If it says expenses net of VAT then that's fine and no ones out of pocket or profiting on this. If it doesn't cover it then you need to argue it out with them and everyone needs to be a bit more careful with their documentation.

Basically the invoice should be whatever the contract that's been agreed says it should be.

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By jashbee
09th Nov 2019 10:55

Hi
Thank you both, this is really helpful.

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