Disbursements

Hi We have hired a contractor to carry out a service on our company’s behalf - to our customer. The contractor charges us their fees and expenses for carrying out the services at our customer site – as the contractor needs to travel to various customer sites where they then carry out their onsite service. The contractor incurs these costs (e.g. hotel, travel to our customer site) which we then get invoiced for – should the contractor be invoicing these costs as "disbursements" when is invoicing us? Thank you

Hi Emma G,
If the contracor is using these services himself then they will not be classed as disbursements and so 20% VAT would need to be added to the recharges.
Please see the guidance here:
25.1 Disbursements for VAT purposes
Thank you.