VAT on top of train expense form

EMPG

Hi there,

Why would you add vat on the top of a train ticket amount on the cash expense form?

i.e. Train ticket paid by staff: £67.80, VAT added on the expense form £13.56. Expense paid back to the staff memeber £81.36.

Thanks

PGM

There's no vat for public transport. So you wouldn't?

EMPG

That is the logic answer - Thank you; I will have to ask the Financial controller who is who prepared the form.

Thanks

Monsoon

Not on an expense claim, no.

If you were billing that on to the client, then you would add VAT (it's not a disbursement) but you reimburse the employee what they paid for it.

PGM

Monsoon wrote: »

Not on an expense claim, no.

If you were billing that on to the client, then you would add VAT (it's not a disbursement) but you reimburse the employee what they paid for it.

So you always add vat to travel when billing it on as a service?

I've seen it billed to us as a separate item without vat. So never been sure..

Monsoon

This comes under the disbursements rule.

If you incur an expense and bill it on to a client, and you're VAT registered, then:

Your fees : VATable.

A cost you incur on behalf of them (that they 'enjoyed') e.g. when I pay the £14 Companies House filing fee for an Annual Return on behalf of a client - this is a disbursement and you don't have to add VAT.

A cost you incur that you enjoyed, not them, e.g. you sat on a train for the meeting, you slept in the hotel, these are not disbursements and if I remember it correctly you have to add VAT.