Client asking for receipts for expenses with invoice?

[Newchodge]

Is it a case where the self employed person is putting the expenses down in his books as a business cost as if he paid the money , yet at the same time being reimbursed by his client thereby using the expense twice

Normally you would just fill in the customer form for expenses and get reimbursed by them and have no reason to put it through his books. therefore he does not require to keep proof to HMRC

That would not make the slightest difference.

Contractor pays £25 for out of pocket expenses and (if possible) claims those as expenses on their return. At the same time they invoice the client for a single figure of £130, of which £25 is out of pocket expenses and £5 is mark up and £100 is the cost of the job. HMRC treats all £130 as income.

 

[paulears]

Is it a case where the self employed person is putting the expenses down in his books as a business cost as if he paid the money , yet at the same time being reimbursed by his client thereby using the expense twice
HMRC

Yes - that's exactly how it works with invoiced expenses - they're just extra. in your own books they are expenses, as an invoice item they shouldn't be preferred to as expenses. My word is subsistence contribution. Never had that one queried by any client - because the clients agree to pay this as a PD or fixed amount. If the client has the receipts, then clearly there are VAT and other implications - you both cannot use these on a VAT return, for example - so having them lumped in with invoice items to me seems the normal method.

 

[Matt-LW]

In the context of this thread, I am 99.9% sure it is just a case of checking up, been tight and been treated as an employee , Small company(accounts people see sub-contracted labour as people working for them, not a sub-contractor and apply what they know, probably haven't thought about it and may not even know better...). at the end of the day and I think they are just trying to be proactive on keeping there costs down, while ignoring that in picking up a cost and passing it on actually costs the sub-contractor time and money, because an employee doesn't....

At the end of the day it is a storm in a tea cup and more a theoretical question than practical, I'm just curious of peoples views on it and interested in an idea of what HMRC would likely think.