Expenses incurred, charged back the agent / client. [and the VAT man]

[TheFaQQer]

I forgot to mention my contract does not state how expenses incurred are handled [Net+VAT or Gross+VAT],

But I did browse the interweb and was not entirely happy with the older posts, hence raising it again, to hear how others invoice expenses / experiences.
Like I said, I've invoiced Gross+VAT for the last four years without any issues, it's just something that's come up with this latest contract [big agency], which I will add, I'm not prepared to take the financial hit no matter what the day rate is like..

It's just not cricket!

There was a long and detailed thread not so far back about this very issue - if the contract is unclear then you have a battle on your hands to get the agency to see things your way.

The correct way to do it (IMHO) is to take your receipts, add VAT and then invoice that to the agency. The agency will then add VAT to that and invoice the client.

However, there is nothing to stop you charging whatever you like as a cost of sale, so it's up to your company how they choose to play the game - either fight the fight with the agency, or adjust your invoice accordingly and take the hit.

In future, make sure your contract is clear about how you invoice expenses back to the agency.

[SueEllen]

I forgot to mention my contract does not state how expenses incurred are handled [Net+VAT or Gross+VAT],

But I did browse the interweb and was not entirely happy with the older posts, hence raising it again, to hear how others invoice expenses / experiences.
Like I said, I've invoiced Gross+VAT for the last four years without any issues, it's just something that's come up with this latest contract [big agency], which I will add, I'm not prepared to take the financial hit no matter what the day rate is like..

It's just not cricket!

It doesn't matter if an agency is big or small.

If they wish to bulltulip you they will.

[ruspuer]

I forgot to mention my contract does not state how expenses incurred are handled [Net+VAT or Gross+VAT],

But I did browse the interweb and was not entirely happy with the older posts, hence raising it again, to hear how others invoice expenses / experiences.
Like I said, I've invoiced Gross+VAT for the last four years without any issues, it's just something that's come up with this latest contract [big agency], which I will add, I'm not prepared to take the financial hit no matter what the day rate is like..

It's just not cricket!

[malvolio]

The other way of looking at this is to consider that YourCo can charge whatever it wants for expenses and that includes charging the equivalent of the net cost of any incidental expenses if you really want to; I'm assuming you have to give copies of receipts to support your claims so they can see the base costs. However the VAT element is actually none of the other party's business since you have to add VAT to any invoice you raise; how they recover it is their problem.

If it's not stated explicitly in the contract, tell them to go away; they can't change the rules unilaterally anyway, but they are wrong. What they are actually doing is hanging on to your legitimate VAT Expenses (do the sums...) at your cost. Another example of agencies treating our companies like they don't exist and are somehow outside the normal rules of business.

[Contreras]

Afternoon all, I have a question regards to expenses incurred by my company, that I charge back to the agent and ultimately the client.

On past contracts, I’ve just invoiced expenses as a Gross figure + VAT [I'm in the Flat Rate Scheme, so do not claim any VAT back]. However, with my latest contract the agency wants the items subject to VAT detailed at Net [as in their view not to pay VAT twice].

Correct me if I’m wrong, I then believe that leaves my company out of pocket with the VAT man as I would add VAT on the Gross figure of the invoice [invoices will typically be a combination of items subject to VAT and items that are not].

What are peoples views or experiences of this? I've clearly got a battle on my hands with the agency..

Lots of threads on this if you care to do a search.

Nothing illegal about charging gross + VAT, but if your contract says that items are to be charged at net + VAT then that's what it is.

"Out of pocket" ? - Not really, IMHO, but it depends which way you want to look at it. It's the cost of doing business, enabling you to charge for services (hopefully) well in excess of the expenses. There should still a decent profit in the contract overall, if not then you have some negotiating to do, or alternatively de-register from the FRS.

If you were to charge gross + VAT then the situation is reversed and YourCo would be making a profit on each expense, even on FRS. Don't forget as well that the loss (or profit) on each expense is subject to CT, so not quite as bad (or good) as it may seem on face value.

[ruspuer]

Afternoon all, I have a question regards to expenses incurred by my company, that I charge back to the agent and ultimately the client.

On past contracts, I’ve just invoiced expenses as a Gross figure + VAT [I'm in the Flat Rate Scheme, so do not claim any VAT back]. However, with my latest contract the agency wants the items subject to VAT detailed at Net [as in their view not to pay VAT twice].

Correct me if I’m wrong, I then believe that leaves my company out of pocket with the VAT man as I would add VAT on the Gross figure of the invoice [invoices will typically be a combination of items subject to VAT and items that are not].

What are peoples views or experiences of this? I've clearly got a battle on my hands with the agency..