Do You Charge Vat on Expenses Incurred?
The Simple Answer Is That If You Are Selling a Standard Rated Product or Service and You Incurred Expenses Doing That – Then You Must Charge Vat on the...
The simple answer is that if you are selling a standard rated product or service and you incurred expenses doing that – then you must charge VAT on the expenses that you are charging to your client. If you incurred a cost on behalf of your client, that you need to pass over to them – then is a disbursement.
Should I charge VAT on expenses incurred?
In general VAT must always be charged but you must not charge VAT on top of VAT. If you didn't incur VAT on the expense, you charge VAT. If you incurred VAT on the expense, you don't charge it again.
Should I charge VAT on disbursements?
When you make payments on behalf of your customers, for goods or services received and used by them, you might be able to treat these payments as 'disbursements' for VAT purposes. This means that you: don't charge VAT on them when you invoice your customer.
David Miller brings 15 years of experience in global economics, personal finance strategy, and market dynamics. He specializes in turning complex economic trends into actionable insights for everyday readers.
