Londoners, contacless on the tube - receipts?

[KayMan]

Thank you for the ample input folks, well understood now. I did come across a post online that went over this issue as it seems some (not mentioned) clients are giving contractors a hard time when they add VAT on top of an already hefty expenses bill. The taxman makes money twice and the client complains that you can just use the "internal expenses" process not understanding the impact. The advice was to always go via the invoicing route even if you had to end up paying the VAT from your own pocket, which I think most of us will agree with.

[MrMarkyMark]

Thank you for the ample input folks, well understood now. I did come across a post online that went over this issue as it seems some (not mentioned) clients are giving contractors a hard time when they add VAT on top of an already hefty expenses bill. The taxman makes money twice and the client complains that you can just use the "internal expenses" process not understanding the impact. The advice was to always go via the invoicing route even if you had to end up paying the VAT from your own pocket, which I think most of us will agree with.

Just the same as paying a tradesman for materials in the building game, if the builder is registered for VAT, No?

I haven't had any issues when I have had an expenses line on my invoice, in the couple of times I have had to do it.

[Lance]

Thank you for the ample input folks, well understood now. I did come across a post online that went over this issue as it seems some (not mentioned) clients are giving contractors a hard time when they add VAT on top of an already hefty expenses bill. The taxman makes money twice and the client complains that you can just use the "internal expenses" process not understanding the impact. The advice was to always go via the invoicing route even if you had to end up paying the VAT from your own pocket, which I think most of us will agree with.

But he doesn't. The client can claim the VAT back.

For you not to invoice with VAT, it would have to be a disbursement rather than an expense. There are very clear rules around what a disbursement is. And an expense is almost certainly never a disbursement.

[KayMan]

This is the post I was referring to. The VAT being paid twice comment was mine, I forgot to account for business claiming back on VAT.

[Lance]

This is the post I was referring to. The VAT being paid twice comment was mine, I forgot to account for business claiming back on VAT.

the method I use to reduce my cost hit is to use non-VAT services where possible. Small hotels (or even better cash hotels), train travel (although I make money on mileage so prefer that - in fact I often take a train but charge my client mileage), small restaurants.

Of course this is only relevant if the client wants to see receipts which is not something you have to do, but they'll often refuse to pay if you don't.
An ideal scenario is where the client accepts an expense limit, and you then bill them for that + VAT.

[fidot]

train travel (although I make money on mileage so prefer that - in fact I often take a train but charge my client mileage),

Don't think HMRC would take too kindly to this

[Lance]

Don't think HMRC would take too kindly to this

and why not?
I'm not defrauding HMRC. My claim from my own company is genuine and valid.

[TheCyclingProgrammer]

Don't think HMRC would take too kindly to this

So long as he's not claiming mileage from HisCo personally when he gets the train, its got nothing to do with HMRC. Its between HisCo and the client what he charges them for travel costs.

[pr1]

other posters are quite right. You put VAT on everything you charge !or else!

I have a client who doesn't like to pay VAT on VAT so they insist that I deduct the VAT from expenses before before I claim. On FRS this equates to me giving them a discount, but then again I'm making 5.5% on VAT anyway. So all good.

just to be pedantic

net invoice =X
gross invoice =1.2X

on FRS 14.5% (assuming that's where you got your 5.5% from)
VAT received from client = 0.2X
VAT paid to HMRC =0.145*1.2X =0.174X

VAT "made" from FRS = 0.2X-0.174X =0.026X = 2.6%

[fidot]

So long as he's not claiming mileage from HisCo personally when he gets the train, its got nothing to do with HMRC. Its between HisCo and the client what he charges them for travel costs.

Agreed, but that wasn't clear from the post I quoted.