I normally just charge a day rate + VAT, which includes all expected expenses - however, recent client has offered to pay expenses for travelling as it's quite some distance.
They have suggested that I pay for the flights, send them the receipt, and they'll reimburse directly via a bank transfer. This doesn't feel right to me at all - whether I do this via my ltd co or via my personal bank account.
Rang HMRC and they were about as much use a chocolate fireguard - they basically said "just do what you like, doesn't bother us". My accountants and various online sources have provided conflicting information regarding how to charge the client.
How I would expect it to work:
* I incur expenses via my ltd co and keep receipts
* I "recharge" the client for the costs via invoice (with added VAT)
* Client pays bill
* I claim VAT back on my expenses
* Client claims VAT back on my invoice only
As far as I understand there is no circumstance where I should be giving the source receipts to the client or agency?
The "recharge" bit is where I'm getting conflicting info. This is NOT a disbursement - i.e. an expense I've incurred on behalf of the client (such as purchasing a web domain on their behalf). Travel expenses are specifically outlined as a recharge on this page.
I can see three potential options:
* Recharge the client as per above (which essentially taxes them twice, but *seems* to be the right way to do it?)
* Invoice the client for 1 day + VAT (which should cover my expenses, but even if it doesn't I'm comfortable with it)
* Get the client to pay for the expenses directly - this would be a logistical nightmare and removes control away from me entirely.
Any experiences rebilling expenses to clients via a ltd co, NOT using an agent or client's internal expenses system (*shudder*)?
If there's no risk with the client's preferred method, I'm fine with it as this isn't a money making exercise. However, there will be a few thousand pounds of expenses over the course of the engagement and I'd like to be 100% clear and comfortable with the terms before I commit - don't want to be audited and hit with an unexpected VAT bill.
They have suggested that I pay for the flights, send them the receipt, and they'll reimburse directly via a bank transfer. This doesn't feel right to me at all - whether I do this via my ltd co or via my personal bank account.
Rang HMRC and they were about as much use a chocolate fireguard - they basically said "just do what you like, doesn't bother us". My accountants and various online sources have provided conflicting information regarding how to charge the client.
How I would expect it to work:
* I incur expenses via my ltd co and keep receipts
* I "recharge" the client for the costs via invoice (with added VAT)
* Client pays bill
* I claim VAT back on my expenses
* Client claims VAT back on my invoice only
As far as I understand there is no circumstance where I should be giving the source receipts to the client or agency?
The "recharge" bit is where I'm getting conflicting info. This is NOT a disbursement - i.e. an expense I've incurred on behalf of the client (such as purchasing a web domain on their behalf). Travel expenses are specifically outlined as a recharge on this page.
I can see three potential options:
* Recharge the client as per above (which essentially taxes them twice, but *seems* to be the right way to do it?)
* Invoice the client for 1 day + VAT (which should cover my expenses, but even if it doesn't I'm comfortable with it)
* Get the client to pay for the expenses directly - this would be a logistical nightmare and removes control away from me entirely.
Any experiences rebilling expenses to clients via a ltd co, NOT using an agent or client's internal expenses system (*shudder*)?
If there's no risk with the client's preferred method, I'm fine with it as this isn't a money making exercise. However, there will be a few thousand pounds of expenses over the course of the engagement and I'd like to be 100% clear and comfortable with the terms before I commit - don't want to be audited and hit with an unexpected VAT bill.
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