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NEIL WARREN considers some practical examples of when VAT needs to be charged to customers on expenses and others that qualify as a disbursement
KEY POINTS
- Recharging travel expenses to a client.
- Cleaning services supplied for tenants.
- Delivery charges depend on the contract between supplier and customer.
- How discretionary is the restaurant service charge?
- Late payment charges.
An outcome of advising many accountants on VAT issues is that you get certain queries on the same subject that seem to crop up quite frequently and very close together. I call these ‘bus’ queries.
At the moment a bus that is arriving with more frequency than denials from MPs that their finances are dodgy relates to VAT charged by a business to its customers on expense items.
Are they zero rated (rail travel etc.) outside the scope of VAT disbursements exempt (credit card charges?) or just plain old standard rated? In this article I will...
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