Reimbursing civil service expenses.

Hi, I am a civil servant working alongside a local authority on a long term project. As part of the partnership agreement, I am eligible to reclaim my travel expenses. I do this via my dept's payroll system, and then periodically my govt dept then invoices the local authority to recoup the costs of my travel. However, my dept are now adding VAT at 20% on top of the amount they are requesting for reimbursement. Is this right? Any guidance greatly appreciated. Thanks.

Hi,
In order for a transaction to attract VAT then there needs to be a supply for a consideration.
If there is no supply for a consideration then no VAT would be added.
However please see the following guidance:
Calculate VAT if you supply staff
Thank you
.