Getting business expenses paid from client (agency)

[dagenheis]

Have a read of this:

HM Revenue & Customs: Costs passed on to clients - disbursements - and VAT

Any costs that your business incurs itself in the course of supplying goods or services to customers are not disbursements for VAT purposes. It's you, and not your customer, who purchases the goods or services, which are supplied to and used by your business.
It's up to you whether or not you itemise costs like these on your invoices. If you do show them separately when you invoice your customers then they're known as 'recharges', and not disbursements, for VAT. You'll have to charge VAT on them whether you paid any VAT or not.

Thanks for sharing the link; Seems like my expenses are 'recharges' rather than disbursements, so I have to issue VAT invoice now.

Just to be clear, all of the expense such as hotel bill, meals, taxis incurred outside UK, plus a couple of taxi bills within the UK, so there wasn't any VAT charged. I suppose, I should still treat them as "recharges".


@TheFaQQer, You are right, I missed the point earlier that I will have to incluide expenses as income in the VAT return which will result in 20% payment even if I don't include VAT on my invoice.. That's not sustainable indeed.

Ta,

[topper]

I have just done this exact scenario and invoiced the client direct, I am not VAT registered yet but soon will be (was thinking on FRS), but I think I will have a hard time getting the client to pay VAT on the gross expenses, and I will have to either

a) go full VAT registered, claim my own VAT back and invoice net expenses plus VAT

or

b) Stay FRS and take the hit and invoice net expenses + VAT and be out of pocket by 13.5% luckily I am not talking about £1500 expense claims!

My client pays mileage at 40ppm, but I personally claim 45ppm from my LTD, meaning technically my LTD has made a loss and thus a reduction in CT? Is my thinking correct there?

[scooby]

Can you invoice VAT retrospectively?

[Clare@InTouch]

Can you invoice VAT retrospectively?

yes, as long as you were VAT registered at the date you're trying to invoice back to.

[scooby]

yes, as long as you were VAT registered at the date you're trying to invoice back to.

How far back 3-4mths? I have two payments (Nov and Feb) from business trips at clients expense and awaiting accountant to respond with how i should proceed!

[northernladuk]

How far back 3-4mths? I have two payments (Nov and Feb) from business trips at clients expense and awaiting accountant to respond with how i should proceed!

If you leave it in to the next financial year you are going to ruffle a lot of feathers. They have done their books and won't appreciate you messing them about IMO