Equiment hire expenses for job

[TheCyclingProgrammer]

I'd just pay the rental with the cash and then give the client the receipt and the change.

I can't see the point in putting it through my own company but maybe I'm over simplifying it....

Probably a simpler way of doing it and keeps it off your books, but OP should make it clear to the supplier that they are acting as an agent for the client and that a VAT invoice is issued in the clients name.

[Wanderer]

The client is aware of the fact that we're hiring the gear and has given me the £100.00 in cash to pay for the rental. My question is, what is the best practice to then use that money to make the rental?

I'd just pay the rental with the cash and then give the client the receipt and the change.

I can't see the point in putting it through my own company but maybe I'm over simplifying it....

[TheCyclingProgrammer]

I suppose that it should be pointed out that if you are VAT registered and the equipment hire isn't a disbursement for VAT purposes, that you need to be accounting for VAT on the £100 your client has given you. You should issue a valid VAT invoice for the service you are providing, irrespective of the hire costs.

[Craig at Nixon Williams]

You charge the expense to the company at whatever it costs you (£100).

You then invoice the client for the amount, plus VAT if you are VAT registered. Client pays the invoice (either £100 if you aren't VAT registered, or £120 if you are).

To expand on what DirtyDog has said, the cost of the rental would then be an expense in your company accounts. So if the client pays you £100 (and thus your turnover increases by £100) and you incur a £100 expense - the company makes no profit/no loss as a result.

Hope this helps!
Craig

[WhiteRoses]

Great, so it really is that simple. So that's interesting – in my field of work, companies often charge for this kind of thing and add a mark-up (for example, printing costs). I guess a large company simply pay for the hire out of business accounts and then include it in the invoice, along with whatever mark up they added.

[DirtyDog]

You charge the expense to the company at whatever it costs you (£100).

You then invoice the client for the amount, plus VAT if you are VAT registered. Client pays the invoice (either £100 if you aren't VAT registered, or £120 if you are).

[WhiteRoses]

I have an issue regarding a particular business expense I'm currently dealing with, and I'm not quite sure how to handle it.

The expense in question is for the hire of photography equipment as part of a job (i.e. it's ultimately for the client's benefit, not solely for my company's benefit). Let's say it's £100.00.

The client is aware of the fact that we're hiring the gear and has given me the £100.00 in cash to pay for the rental. My question is, what is the best practice to then use that money to make the rental?

As far as I can tell I should put the cash into my business account and then make the hire using the business account. Would this then count as an administration cost (i.e. since no profit is made off the money going in to the account)?

I'm slightly confused as to whether or not that is the way costs like these are handled, as my company would essentially just be invoicing £100.00 and then spending the same £100.00 on the cost of hire. I guess the other way would be to pay for the hire personally and then charge as an expense, but surely that would be poor practice. Obviously I want to balance my books.