Originally posted by Stevolution
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Previously on "Question regarding expenses as a sub contractor"
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Thanks for all the varied responses.
After a chat with online HMRC, they are wrong, not me.
They withheld all the payments for materials supplied for no good reason, not just the fuel one they were disputing.
They keep asking me to complete an employees expenses sheet. Wrong.
It's cleared up now. They need me more than I need them, so I told them today was my last day. Life's too short for this messing around. Got paid 10 minutes later.
I KNOW they fraudulently claim VAT back. I worked for them on the cards for 18 months and they would get people to bring receipts in for work on their private houses and claim them back.
I will be reporting them, once I get my final invoice paid.
Thank you for the advice.
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OP is recharging for the cost of the fuel incurred, presumably as agreed in their contract. As they aren’t VAT registered the cost to them was whatever the VAT inclusive price was, say £12 for example.
There is no VAT for the client to reclaim as OP hasn’t charged them VAT, they have charged £12 to cover their costs. I’m aware employers can claim VAT on fuel costs incurred by employees but I don’t think that extends to supplier recharges.
If OP had been VAT registered they would have reclaimed the £2 as input VAT so the cost to them would have been £10, which they could have recharged as £10 + VAT. Same total amount but the client would have then been able to reclaim the VAT themselves on OPs invoice (and they still wouldn’t have needed a VAT receipt as the relevant VAT is on OPs invoice).
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Originally posted by eek View Post2) It's not illegal to claim back VAT on fuel purchases for mileage claims and it's fine to block without prove of fuel payment.
The OP puts it on the invoice, adds no VAT as not VAT registered. If the OP was VAT registered then he'd charge 20% and the client can reclaim that VAT.
I'm not so sure that the client can claim the VAT on another company's VAT receipt. It's not a disbursement.
Realistically the client will be fine claiming the VAT and as it won't have been double claimed it won't be fraud. But I don't think it's correct VAT handling as the client have not incurred a mileage expense with any VAT on it.
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VAT law is pretty uniform across Europe, and I did work as a contractor in the UK for many years, handling my own VAT affairs. This question has been raising its head for decades, and really is no different from the recent thread concerning ltd co claiming expenses from a consultancy.
Originally posted by eek View Post1) a company can insist on whatever paperwork and jumps they desire for expenses as you actually have no direct right to them.
Originally posted by eek View Post2) It's not illegal to claim back VAT on fuel purchases for mileage claims and it's fine to block without prove of fuel payment.
When my ltd co contracts a plumber to fit a dishwasher in the company kitchen, where there are no current connections, his invoice could have three items on it.
1. Labour
2. Parts
3. Fuel
My ltd co could insist that the plumber shows me the receipts for 2 & 3, but the plumber doesn't have to do that unless it's agreed in advance that he will. The invoice stands. If he wishes to mark up the parts and fuel costs by 100% and charge my co. that, he can do it. If he's not VAT registered, then there is no VAT for my co to reclaim. If he's VAT registered, then he adds VAT to the total, and my co can claim it back. . What my company cannot do is take the receipts for 2&3 and claim the VAT back for that.
Now, if you see the case differently, feel free to explain.
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Issue a Credit Note for the full amount - advise them of this before you do so.
Re-invoice, and only invoice for the amount of your work, plus the items for which you have VAT invoices. This should tie in with their remittance.
It really isn't their fault for you not obtaining & supplying qualifying VAT invoices. A debit / credit card receipt is not sufficient for VAT purposes. It needs to reflect the supplier's VAT number, and the VAT paid.
If you manage to obtain the VAT invoices which are missing, then invoice them for these amounts separately.
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Originally posted by NotAllThere View PostIf you sold these items to the company, then they wouldn't be able to claim the VAT back. If they bought them on your behalf, they would.
They must pay your bill as it stands. These are your expenses. Not theirs.
If you suspect VAT fraud, report them to HMRC. Chances are they don't realise they're doing anything wrong.
1) a company can insist on whatever paperwork and jumps they desire for expenses as you actually have no direct right to them.
2) It's not illegal to claim back VAT on fuel purchases for mileage claims and it's fine to block without prove of fuel payment.
3) by accepting partial payment it's going to be harder to get those expenses back because you've accepted payment for the work.
But apart from being 100% wrong (hardly surprising as you don't actually live in the UK) thanks for the postLast edited by eek; 10 August 2020, 07:25.
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If you sold these items to the company, then they wouldn't be able to claim the VAT back. If they bought them on your behalf, they would.
They must pay your bill as it stands. These are your expenses. Not theirs.
If you suspect VAT fraud, report them to HMRC. Chances are they don't realise they're doing anything wrong.
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Question regarding expenses as a sub contractor
Hello all
I am not vat registered, and working on an hourly rate to a local company.
Not particularly relevant here, but using my own vehicle, tools etc.
While using their vehicle a few weeks, back, I incurred fuel costs and I also purchased some materials from my own pocket to complete the installation.
I submitted my invoice to them, along with a breakdown of dates, the item purchased, where purchased and amount.
I also included a scanned copy of all the receipts for proof of purchase.
At the end of the invoice, I listed materials as one total, labour as another total and then the complete owed amount.
Come payment, they only paid the labour portion of the invoice and withheld the materials. They say they will not pay it until I produce VAT receipts.
Well, I didn't obtain a VAT receipt for the fuel (I forgot to ask), but they have a copy of the Visa receipt for the amount. I could find the receipt for the other materials, but again, they have a copy of the Screwfix receipt.
I can only assume they want my VAT receipts to illegally claim my VAT back (and I know they have done this with other sub contractors).
I am standing my ground, and told them they cannot 'split' my invoice like that. I have provided more than enough evidence of my expenditure.
Or... am I wrong?Tags: None
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