Application of VAT

paulr
paulr Registered Posts: 48 Regular contributor ⭐
Good morning,
a subcontractor who is a HGV driver invoices weekly;
he is Vat registered and levies standard rate on his Labour hours;
he also gets paid £20 a night for overnight allowance which is exempt from Income Tax and not charged VAT;
however his Accountant is telling him that the total invoice value should be levied at 20%;
which is correct?
thanks,
Paul.

Comments

  • KernowAccountant
    KernowAccountant Registered Posts: 103 Epic contributor 🐘
    paulr said:

    Good morning,
    a subcontractor who is a HGV driver invoices weekly;
    he is Vat registered and levies standard rate on his Labour hours;
    he also gets paid £20 a night for overnight allowance which is exempt from Income Tax and not charged VAT;
    however his Accountant is telling him that the total invoice value should be levied at 20%;
    which is correct?
    thanks,
    Paul.

    As the driver is a self-employed individual, why do you believe the £20/night "allowance" to be exempt from Income Tax?
  • paulr
    paulr Registered Posts: 48 Regular contributor ⭐
    overnight allowances are exempt
  • KernowAccountant
    KernowAccountant Registered Posts: 103 Epic contributor 🐘
    paulr said:

    overnight allowances are exempt

    Are they really?!? Please provide a legislative reference for that... because I don't believe you!
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