Billable expenses - VAT Return

[Bluebird]

thanks Bluebird

ah pants ... so I need to charge them 45p per mile plus VAT

Ta...

JR

not sure I understand why you want to charge them 45p, you can charge them what you like as long as they agree to pay it.

However, as an employee of your own company you can only claim tax relief at the rate of 40p per mile...

[Rudster]

thanks Bluebird

ah pants ... so I need to charge them 45p per mile plus VAT

Ta...

JR

[Bluebird]

... surely mileage is exclusive of VAT as the supplier (employee) is not VAT registered and therefore should not be included in the FRS calc?

Ta...

JR

You're not "billing" milage, you're billing an amount which are part&parcel of the terms of your service agreement which is VATable.

The fact that the amount you charge the client for expenses covers milage is neither here nor there.
It could be for hookers or drugs, as long as the client is happy that they are expenses and they will pay for them under the terms of your contract, then they are VATable.

[Rudster]

QB can't cope with FRS - that's why I'm dumping it now I'm afraid...

... it is possible to do it using VAT adjustments but it's a pain

To be honest, I think I may revert to an Excel file combined and the HMRC tools.

JR

[cojak]

QB can't cope with FRS - that's why I'm dumping it now I'm afraid...

[Rudster]

Up to now, I have just added the expenses to the bottom of the service invoice, but the client has now asked me to invoice them seperately.

To be honest, the client is flexible ... so what would you recommend?

So in your scenario, you invoice £11k, the VAT you invoice is £1925, the VAT you pay is [ 13% of 12925 ] = £1680.25

... surely mileage is exclusive of VAT as the supplier (employee) is not VAT registered and therefore should not be included in the FRS calc?

Ta...

JR

[NetwkSupport]

"re-chargable" expenses and "expenses" are two completely separate things.

One the client pays you back for and the other is expenses your ltd co has incurred

[NetwkSupport]

totally correct bluebird

I used to bill a client re-chargable expenses in exactly the same way (I paid for my car hire, hotel etc in advance for the month then they paid me it back)

Ok heres what to do (example)

consultancy £10,000
re-chargable expenses £2,000

total £12,000
vat @ 17.5% on £12,000 = £2,100

invoice total £14,100

so HMRC will expect £2,100 to be paid back for that invoice

unless you're on the flat rate scheme. You should run everything by your accountant though, thats what you pay them for

[expat]

I was under the impression that if you bill the client for "expenses" then these form part of the service you provide, and therefore you charge VAT on them.

It can be so, but it ain't necessarily so.

Did the client agree to reimburse your expenses, or to allow you to add the amounts to your invoice? These are the 2 quite different choices. Each is in itself valid, but what was agreed?

[Bluebird]

Ah OK,

The company is on the FRS, so example to clarify...

--- Calculations

Net sales £9,000
Exp inc VAT £1,000 (Hotels / Toll)
Exp not VAT £1,000 (Mileage)

Net total £ 11,000
VAT £ 1,750 (of £10k)

GROSS SALES £ 12,750
(VATABLE GROSS £11,750

FRS VAT £1,527.50 (VAT GROSS * 13%)

--- VAT Return

Box 5 = £1,527.50
Box 6 = £11,000

---

... is that right?

Ta... JR

I was under the impression that if you bill the client for "expenses" then these form part of the service you provide, and therefore you charge VAT on them.

So in your scenario, you invoice £11k, the VAT you invoice is £1925, the VAT you pay is [ 13% of 12925 ] = £1680.25

But I'm not an accountant and I'd check the bit about non-vatable expenses...

[Rudster]

Ah OK,

The company is on the FRS, so example to clarify...

--- Calculations

Net sales £9,000
Exp inc VAT £1,000 (Hotels / Toll)
Exp not VAT £1,000 (Mileage)

Net total £ 11,000
VAT £ 1,750 (of £10k)

GROSS SALES £ 12,750
(VATABLE GROSS £11,750

FRS VAT £1,527.50 (VAT GROSS * 13%)

--- VAT Return

Box 5 = £1,527.50
Box 6 = £11,000

---

... is that right?

Ta... JR

[Bluebird]

Hi all

I've been using Quickbooks 2008 to run the company accounts, which is the most unstable software product I have ever encountered (including Microsoft).

Anyway, I'm trying to file a VAT return for the last quarter and it's including my billable expenses on the return (I guess this is because I included them on an invoice). This is the first contract I've won with billable expenses and I just wanted to clarify that expenses (hotels, travel) should not be included in the sales for that quarter?

If not, how do I adjust the sales figure in QB ... unfortunately the Quickbooks web site is down ... unbelievable crock-a-tulipe!

Thanks...

JR

O though they were included eg:

Onvoice to Client:

Work Done = £10,000
Expenses = £2,000
VAT = £2100 [ 17.5% of 12k ]
Invoice amount to client = £14,100

so then when you make you VAT return you pay to HMRC the £14,100 or whatever the amount is based on FRS.

[Rudster]

Hi all

I've been using Quickbooks 2008 to run the company accounts, which is the most unstable software product I have ever encountered (including Microsoft).

Anyway, I'm trying to file a VAT return for the last quarter and it's including my billable expenses on the return (I guess this is because I included them on an invoice). This is the first contract I've won with billable expenses and I just wanted to clarify that expenses (hotels, travel) should not be included in the sales for that quarter?

If not, how do I adjust the sales figure in QB ... unfortunately the Quickbooks web site is down ... unbelievable crock-a-tulipe!

Thanks...

JR