There is a distinct difference and more importantly an implication for VAT purposes between recharges and disbursements charged on to customers;
Disbursements
Disbursements are where payments are made to a supplier on behalf of a customer and subsequently these costs are passed on to the customer when invoicing them. Disbursements should not include VAT when charged on to the customer, this is because effectively you’re just acting as their agent.
In order to treat a payment as a disbursement all of the following must apply;
Recharges
Costs that your business incurs itself when supplying goods or services to customers are recharges and not disbursements for VAT. Recharges should be invoiced to customers including VAT on sales invoices.
Examples of costs that are recharges and not disbursements are;
Please do not hesitate to contact us should you require any assistance with VAT matters.
The information in this article is believed to be factually correct at the time of writing and publication, but is not intended to constitute advice. No liability is accepted for any loss howsoever arising as a result of the contents of this article. Specific advice should be sought before entering into, or refraining from entering into any transaction.