{"id":3920,"date":"2022-08-02T11:20:41","date_gmt":"2022-08-02T10:20:41","guid":{"rendered":"https:\/\/cloud9accountingteam.co.uk\/?p=3920"},"modified":"2022-08-02T11:21:47","modified_gmt":"2022-08-02T10:21:47","slug":"managed-lets-is-vat-due-on-recharged-expenses","status":"publish","type":"post","link":"https:\/\/cloud9accountingteam.co.uk\/sk\/managed-lets-is-vat-due-on-recharged-expenses\/","title":{"rendered":"Managed lets \u2013 is VAT due on recharged expenses"},"content":{"rendered":"

If you use an agent to manage a let property, they may incur expenses, such as repairs and cleaning costs, on your behalf and recharge these to you.<\/p>\n

Where this is the case, will you need to pay VAT on those expenses?<\/p>\n

Recharge or disbursement?<\/strong><\/p>\n

Where costs are incurred by the agent and passed onto the landlord, it is necessary to determine whether the cost is a recharge or a disbursement. This is an important distinction as the VAT treatment differs.<\/p>\n

Disbursements<\/strong><\/p>\n

A payment made to a supplier on behalf of a customer is called a disbursement. This would be the case, for example, if the letting agent arranged for a plumber to repair a shower in a let property and paid the repair on the landlord\u2019s behalf, passing the cost onto the landlord.<\/p>\n

The letting agent does not need to charge VAT when passing on the cost of the disbursement to the landlord \u2013 it is the landlord rather than the customer who receives the service.<\/p>\n

For a payment to qualify as a disbursement, all of the following conditions must be met:<\/p>\n