Skip to main content

This is a new service – your feedback will help us to improve it.

Posted Mon, 31 Jul 2023 10:07:42 GMT by JWJ
Hi I am self employed as a chauffeur I regularly park my clients car at Airports and claim the costs back from him approx £600 a year, likewise I occasionally fill his car up approx £500 a year which he uses I only use it when collecting him. Are these costs a disbursement as opposed to a recharged expense? I am not VAT registered but my expenses are negligible and the £500 parking fees and petrol costs take me over the £1000 employment allowance, if it is a disbursement I believe I can then claim the full £1000 allowance thus saving me tax?
Posted Mon, 07 Aug 2023 13:22:18 GMT by HMRC Admin 8
If you merely pay amounts to third parties as the agent of your client and debit your client with the precise amounts paid out, then you may be able to treat them as disbursements for VAT purposes
You would need to meet all the below conditions for this to be treated as a disbursement:
•you acted as the agent of your client when you paid the third party
•your client actually received and used the goods or services provided by the third party (this condition usually prevents the agent’s own travelling and subsistence expenses, phone bills, postage, and other costs being treated as disbursements for VAT purposes)
•your client was responsible for paying the third party (examples include estate duty and Stamp Duty payable by your client on a contract to be made by the client)
•your client authorised you to make the payment on their behalf
•your client knew that the goods or services you paid for would be provided by a third party
•your outlay will be separately itemised when you invoice your client
•you recover only the exact amount which you paid to the third party
•the goods or services, which you paid for, are clearly additional to the supplies which you make to your client on your own account
Thank you.

You must be signed in to post in this forum.