Expenses

[Gravy Train]

Just wanted to clarify the following:

Say I am running a Ltd company and invoice the client co for £1,000 for my services in the week and i also incurr hotel costs of £100 and fuel costs of £50 at 40p per mile which the client agrees to pay for and asks for me to submit my receipts for the hotel.

My total invoice would be £1,150.

I then receive the money and transfer £150 from my business account to my personal account.

When i am working out how much CT i owe for the week, should i be calculating this on total billings (ie £1,150) or can i deduct the £150 additional expenses.

I think i know the answer but please humour me if you know for sure

[Watermill Accounting]

You can deduct £150 expenses incurred.

[Gravy Train]

ta - thought so!!!

[Bluebird]

don't forget that when you raise your invoice you apply VAT to the whole amount, and if you are on the FRS you can actually make some money from this [ although it's only a few quid]

[Gravy Train]

Cheers yes, i did this ... but then again, you have to declare the profit on the VAT from the FRS scheme and then pay CT on it... i believe

[PayMatters]

You should also deduct the vat from you hotel bill before billing the client!

i.e. you chagre them your net cost plus vat.

[blacjac]

You should also deduct the vat from you hotel bill before billing the client!

i.e. you chagre them your net cost plus vat.

Not if you are billing it as part of your service you shouldn't

[Sausage Surprise]

Not if you are billing it as part of your service you shouldn't

Agreed..

[Bluebird]

Cheers yes, i did this ... but then again, you have to declare the profit on the VAT from the FRS scheme and then pay CT on it... i believe

correct, but then profit less 21% is better than no profit at all...

[PayMatters]

Not if you are billing it as part of your service you shouldn't

If your hotel bill is 115 and 15 of that is VAT then to recharge the cost to your client (assuming you can claim all the vat back on the hotel bill) you would charge your net cost plus vat i.e. 100 plus 15 (so it is exactly the same as the client paying for the bill themselves). Agree you'd make more money if you charged 115 plus vat but that's not how it should strictly work.