Sarah Perrett

Hi We have a UK based contractor who is VAT registered and recently completed an audit on our behalf for a customer of ours based in Dublin, Ireland. The contractor's invoice includes a charge for his time plus associated travel expenses as part of the audit. Some of these expenses were incurred in the UK and some in Ireland. The contractor has applied 20% on all the expenses incurred which means some of the costs are more than what was actually paid out, As an example car hire in Ireland after conversion from Euros totalled £196.91 including 13.5% Irish VAT of £23.42 but the contractor's invoice is showing the full cost of the expense, £196.91, plus 20% VAT, making £236.29. I know for VAT registered contractors a UK expense should be recharged to us net of VAT, where applicable, and 20% VAT applied but what about expenses incurred outside the UK? How should these have been charged to us? Does place of supply kick in or the reverse charge? Thanks Sarah Perrett

We have several self employed contractors who invoice us each month for inspections and audits they complete. We pay an agreed fee for each type of inspection or audit and in addition to this they can recharge any associated travel expenses made up of mileage paid at HMRC rates of 45p per mile or 25p per mile, accommodation, subsistence and other travel costs (parking or flights) etc, My question is should the contractor provide us with copies of receipts as back up to the travel expenses they are claiming so we have these for our records? Or should we just check the cost they are claiming is reasonable? Thank you