Tax question

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ykwong1978
ykwong1978 Registered Posts: 48 Regular contributor ⭐
in AAT Level 3 (Level 6 in Scotland)
Hi all,

I was sent an invoice for a portacabin that we have currently hired. The company that we have used has hired this from another company, so for example lets say they were charged £117.50 (£100 + £17.50 VAT).
We are billed £138.06 (£117.50 + £20.56 VAT), which they attach their invoice as a backing sheet.
Can anyone please let me know if this is correct/legit?
Thanks
Ying

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  • coojee
    coojee Registered Posts: 794 Epic contributor 🐘
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    Well they can charge you whatever they like. They could claim that they were adding on 17.5% as their profit. If they've paid £100 plus VAT for it and assuming they can reclaim the VAT then what's in it for them if they recharge it to you for £100 plus VAT? They haven't made any money on it then have they.
  • ykwong1978
    ykwong1978 Registered Posts: 48 Regular contributor ⭐
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    Thanks for your response.
    My boss wanted me to find out, and I thought that it seemed fair, as they would just be recharging us, and earning no profit from this service.
  • coojee
    coojee Registered Posts: 794 Epic contributor 🐘
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    It depends what's in the contract. If your contract says that they will recharge you at cost then it's not legit (assuming they can reclaim the VAT)

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