Reply to: recharging expenses

[tractor]

...

Regardless of how you treat the VAT, you need to first ask if the expenses that you are claiming meet the various tests set by HMRC.

See the PCG advice Here

This is all basic stuff you should know when running a business anyway. I don't know whether your 10 Euro lunch was an arbitrary answer but it's unlikely to be a (tax) claimable expense anyway so whilst it's a grey area, if your client is happy to pay for your meals, then yes you need to recharge VAT on them if you are billing in the UK and are VAT registered.

[malvolio]

Sorry if Ive misunderstood this thread, it was getting on last night but seeing as most of my time will be spent outside the UK it seemed a valid question and one that could prove very costly if I get it wrong!
The OP was told that his training costs should be reclaimed with VAT added regardless of whether VAT had already been paid in the original price and a link to the HMRC site confirmed this.
Does not seem logical to me but there you go, however the link didnt mention overseas expenses and if VAT in GBP should be added to a 10 EUR lunch bought in Europe at he client site, Im guessing the answer is going to be Yes again but just wanted to confirm.

thanks.

Assuming I've read it correctly (by no menas a given...) if you're invoicing a UK client for work done by your UK company in the UK, you have to charge VAT. The fact that you have to visit overseas locations to deliver the work is incidental, you are in effect supplying in the UK where VAT is applicable. If the whole gig was non-UK, then the situation changes.

And if you're client is VAT registered, they won't care anyway.

[windowlicka]

Sorry if Ive misunderstood this thread, it was getting on last night but seeing as most of my time will be spent outside the UK it seemed a valid question and one that could prove very costly if I get it wrong!
The OP was told that his training costs should be reclaimed with VAT added regardless of whether VAT had already been paid in the original price and a link to the HMRC site confirmed this.
Does not seem logical to me but there you go, however the link didnt mention overseas expenses and if VAT in GBP should be added to a 10 EUR lunch bought in Europe at he client site, Im guessing the answer is going to be Yes again but just wanted to confirm.

thanks.

[northernladuk]

Bump this thead please - I was searching old threads to see if I could find one about recharging expenses and whether I needed to keep photocopies of receipts for hector - as my client would want the originals to pay the claim. Anyway I found this thread instead and was very surprised that travel expenses etc would have VAT added twice for the client to pay - very sneaky!
Anyway my question off the back of all that is as follows - my client only pays these expenses on overseas assignments, hotel, taxis, meals etc so will additional UK VAT still be applicable when I put the claim in?

thanks.

Do people even attempt to understand their situation with these questions or just ask them, they get an answer and go away none the wiser????

[windowlicka]

Bump this thead please - I was searching old threads to see if I could find one about recharging expenses and whether I needed to keep photocopies of receipts for hector - as my client would want the originals to pay the claim. Anyway I found this thread instead and was very surprised that travel expenses etc would have VAT added twice for the client to pay - very sneaky!
Anyway my question off the back of all that is as follows - my client only pays these expenses on overseas assignments, hotel, taxis, meals etc so will additional UK VAT still be applicable when I put the claim in?

thanks.

[tractor]

I agree with your thoughts but given the amount of money involved I put it down to experience. In addition, I found that the agency's self invoicing system made it very hard to get them to take any notice of anything I sent to them. In the end they even started to put the phone down when I called them.

I won't say how, but I did get what was owed to me anyway by other means. I will never work through that agency again and I will try to put off anyone who I know is thinking of working through them, most of the jobs are always up with several agents so you get to choose who to apply through.

I'm going through this argument with a model contract at the moment so name and shame or send me a pm pls.

[TheFaQQer]

Assuming you're still within the 2 years rule - so you're already claiming home to client travel - it will be from whereever you start your journey to the training course.

I disagree - it's nothing to do with the 2 year rule what you charge your client for mileage and travel. It's only what you pay your employee / reimburse the director where the 2 year rule comes into play.

Bill the client as much as you can get away with.

[SueEllen]

I agree with your thoughts but given the amount of money involved I put it down to experience. In addition, I found that the agency's self invoicing system made it very hard to get them to take any notice of anything I sent to them. In the end they even started to put the phone down when I called them.

I won't say how, but I did get what was owed to me anyway by other means. I will never work through that agency again and I will try to put off anyone who I know is thinking of working through them, most of the jobs are always up with several agents so you get to choose who to apply through.

What does this agency name sound like?

[Fred Bloggs]

I agree with your thoughts but given the amount of money involved I put it down to experience. In addition, I found that the agency's self invoicing system made it very hard to get them to take any notice of anything I sent to them. In the end they even started to put the phone down when I called them.

I won't say how, but I did get what was owed to me anyway by other means. I will never work through that agency again and I will try to put off anyone who I know is thinking of working through them, most of the jobs are always up with several agents so you get to choose who to apply through.

[NotAllThere]

Yuu need to read this article carefully. Note that some agencies will point blank refuse to pay VAT on top of expenses that you have already paid VAT on despite the fact that they are wrong when you are invoicing a recharge not a disbursement. I lost money last year when the agency point blank refused to pay my VAT as invoiced, my accountant assured me that I was invoicing correctly and I sent the agency a marked up copy of the HMRC article above but they still refused to pay.

You submitted them a legal invoice, with correctly applied VAT, and they haven't paid the invoice in full. Sounds like a trigger for dunning. Once it got to court, surely they'd have had to pay up. Might be too late, but I'd start dunning them now, and add admin charges and interest in accordance with the appropriate legislation..

Another thing about rechargable expenses. If I'm claiming mileage from the customer for attending this training event do I claim the mileage from my registered company address to the training location or from my clients offices to the training location?

Assuming you're still within the 2 years rule - so you're already claiming home to client travel - it will be from whereever you start your journey to the training course.

[knight007]

Another thing about rechargable expenses. If I'm claiming mileage from the customer for attending this training event do I claim the mileage from my registered company address to the training location or from my clients offices to the training location?

[Fred Bloggs]

Yuu need to read this article carefully. Note that some agencies will point blank refuse to pay VAT on top of expenses that you have already paid VAT on despite the fact that they are wrong when you are invoicing a recharge not a disbursement. I lost money last year when the agency point blank refused to pay my VAT as invoiced, my accountant assured me that I was invoicing correctly and I sent the agency a marked up copy of the HMRC article above but they still refused to pay.

[TheFaQQer]

what about If the expense incurred already had VAT added to it.
e.g. Imagine if rail travel was taxed at 20% so my rail receipt would have been something like:
Subtotal: 100
VAT (20%): 20
Total = £120.

When recharging this to client, do I apply a further VAT on top? or do I have to subtract the vat portion of the expense i.e £20 and then reapply it at the end when applying my 20%.

Add up your expenses.

Put them on an invoice, either with the rest of your charges or as a separate invoice.

If you are VAT registered, then apply VAT to the invoice.

[knight007]

what about If the expense incurred already had VAT added to it.
e.g. Imagine if rail travel was taxed at 20% so my rail receipt would have been something like:
Subtotal: 100
VAT (20%): 20
Total = £120.

When recharging this to client, do I apply a further VAT on top? or do I have to subtract the vat portion of the expense i.e £20 and then reapply it at the end when applying my 20%.

[chef]

Sounds like you need a better accountant, or to ask for clarification.

What FaQQer said

you pay your accountant to provide you a service if your not happy or dont understand they should explain it to you better, if they don't meet your expectations then find an accountant that does. Your not being thick by asking for a better explanation, your running your business.