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VAT position

employee repaying costs

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a client has bought some materials and reclaimed VAT on the purchase - all seems fine

however an employee has taken some of the materials and reimbursed the employer for them .....however this has been net of VAT amount of the materials

i'm not entirely sure that this is correct, should the client not reclaim VAT on the purchase, or charge a VAT inclusive amount back to the employee?

it looks like this may happen a lot with this client going forward so we want to make sure they are gettign it right

thanks

 

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By Paul Crowley
09th Jul 2020 13:29

Employer charges VAT on supply to employee

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RLI
By lionofludesch
09th Jul 2020 14:45

Employer has sold the goods to the employee.

Nothing out of the ordinary here. Businesses sell stuff all the time.

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By legerman
09th Jul 2020 18:47

You should account for VAT on the transaction, and let them know next time they'd be advised to charge the employee after adding VAT, not Nett

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By Matrix
09th Jul 2020 19:55

You will need to treat the proceeds as VAT inclusive.

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