Expenses and VAT confusion

[TheCyclingProgrammer]

You could simply add 20% to the expenses, which is in effect VAT on VAT but a hot financial controller in your client org will very quickly stop that.

It’s not “VAT on VAT”. It’s “whatever you’ve agreed with the client to recharge for your expenses” + VAT.

This could be the original VAT inclusive cost although I agree that most clients would normally expect to be recharged the net cost plus VAT. It could be anything that has been agreed though including a fixed per diem. It’s all just part of your overall service fee.