Vat Query

Yazi

Hello

I have a VAT query if anyone can assist would be grateful.

The scenario = selling computer equipment.
Customer wants us to arrange insurance for a three year Computer Theft and Accidental Damage.

Invoice from the Supplier will have no VAT. (Exempt invoice)
Will have the Premium and IPT.

Do we charge standard Vat to the customer on either or both of the following? (Or is this charged as zero or exempt.)

a) We sell on at the same price as charged to us.

Or

If we charge more than we have been charged.

Thanks in advance.

Yas

visha

I believe this the same senario as Solicitors who will arrange and buy services on behalf of their clients and for the client's use only.

Under that circumstances you can not claim vat input for that expense nor would you charge vat on that disbursement.

OIf you have arranged the insurance on behalf of your customer, presumably the service/maintenance/insurance contract is between your custome and the service/insurance provider. Therefore you can not claim the vat input or charge the vat out put. You will have to list that expense separately on the invoice to your customer for the full amount that has been charged to you.

If you decide to charge more then the insurnace company's invoice ie you want to make profit then you have to charge VAT on the FULL amount because now you are providing a service.

You can ofcourse make a separate charge on your invoice and I would advise you to do that for a nominal fee, and charge vat on that service that you have provided your customer.

Hope this helps
or google it as vat on solisitor's disbursements and you will get all the technical information

Yazi

Thank you for your help Visha

Yas