The company I work for (company A) is setting up a new off shoot company (company B). Prior to launch we paid for domain registration on company A's debit card on company B's behalf (they knew about the purchase) for which I now need to invoice company B. Company A paid VAT on the purchase.
I gather from the HMRC website that the purchase can be classed as a disbursement for VAT purposes, so I shouldn't charge VAT. So if company A paid £20 + VAT@17.5% (purchase was 2010) = £23.50 should I invoice company B for £23.50 net? What is the T code?
Company A have claimed back the VAT on the original purchase.
If it's a disbursement, you should be passing your net cost through - so £20. Otherwise, company A is making a profit - which is not what disbursements are about.
