Charging VAT exempt client for kit bought in UK

[d000hg]

I need to buy a bit of kit to test something and my client is happy I charge them for it.

I'm Vat registered so normally would buy it ex-vat or claim back the vat. But my client is in a country exempt from vat so how does this work? Do I just bill then the ex-vat price or is that dodgy?

I will own the item, I'm expensing the client rather than them buying it. And it's only about £100+Vat but I want to make sure.

[vwdan]

Kit purchase (presumably) meets the wholly and exclusive test - I think that you're going to be charging the client for it is immaterial. Remember that there's no law that you have to invoice what you paid - you could mark it up, or discount it to suit.

Treat the purchase as you would any other business purchase - and write up the invoice in the same way as if the extra charge was for your time.

I.e., I don't think there's any actual accountancy link between the two here - it's an additional line item on the invoice that may aswell be "Additional charge for extra polite e-mails".

As for WHAT you charge them - I guess that's up to them and you to decide. "Morally", I'd suggest your invoice line should be the ex-VAT charge as that's effectively what it cost you.

[TheFaQQer]

I'm Vat registered so normally would buy it ex-vat or claim back the vat. But my client is in a country exempt from vat so how does this work? Do I just bill then the ex-vat price or is that dodgy?

You bill them what you agree with them - it might be the £100 ex VAT, it might be £100 plus VAT, it might be £1000.

There is nothing that says you must invoice for the item in a specific way, save for the agreement between the companies.

It's another line on the invoice. I'd invoice £100 and then add VAT to the whole lot.

[d000hg]

You bill them what you agree with them - it might be the £100 ex VAT, it might be £100 plus VAT, it might be £1000.

There is nothing that says you must invoice for the item in a specific way, save for the agreement between the companies.

It's another line on the invoice. I'd invoice £100 and then add VAT to the whole lot.

But I can buy and claim back the vat as normal since I'm not selling it on? Wanted to double check I don't inadvertently evade vat that's all

[WTFH]

To me it's two totally separate transactions, and you should treat it as such.

Transaction 1: Your company is buying an item costing £100+VAT. That's what your company buys, that's what goes on your books. If the item is something that your company will hold on to then it is a company asset and should be recorded as such.

Separate transaction 2: Your company invoices the client for an expense - which is the use of the item. The amount on the invoice is entirely up to you, whether it be £100, £120, £50 or £500. It's not up to us, or HMRC, to decide whether you make a profit or a loss on a transaction.
Now, on transaction 2, the question about VAT is: do you charge VAT on other lines of your invoice, such as expenses? If the answer is yes, then you should charge VAT on this line. If no, then don't.

Two separate transactions. That's how I see it.

[TheFaQQer]

But I can buy and claim back the vat as normal since I'm not selling it on? Wanted to double check I don't inadvertently evade vat that's all

I would think so - your company is buying is, so claim the VAT back on the purchase.

What your company then does with the asset is up to them.