Issue 13: Recharged Expenses #MR. VAT
This one
often creates a bit of confusion so I am going to break it down for you.
Where you
have two companies sharing expenses by one recharging to the other, it is a simple
process if both companies are VAT registered.
However,
where one company (company B) is not VAT registered, it is better to
have the registered entity ( company A) bear the full cost of the vatable expense
and then recharge a portion of it, plus VAT, to company B. Otherwise if company
B is the main purchaser, the VAT on the expense will be totally lost and thus
irrecoverable.
More on
this next week….
