As far as I understand the company A wants to recover their expenses on the franking machine and therefore the invoice from A to B should show the postage as exempt of VAT and the rent of the franking machine at the standard rate of VAT. Why? Because the company A does not pay VAT on postage, and it pays 20% VAT on the rent of the machine.
-- Edited by JulieS on Tuesday 28th of May 2013 11:55:17 PM
Company A and company B - two seperate identities working from the same address, both seperate limited companies, both registered for VAT.
Company A has a franking machine in which top ups for postage are purchased thru pitney bowes all exempt from VAT. The rent of the machine has VAT charged at 20%.
Company B uses said franking machine regularly. Company A invoices Company B for postage used and a part amount of the rent. The invoice to company B for the rent has VAT at 20%. But should the postage invoice?
Ive spent quite a while trying to find the answer to this tonight and Im still no clearer.
Thanks for this. That is exactly what I thought. However, someone mentioned to me .. that the sales invoice for postage from company A to company B - would be classed as 'secondary postage' like a second charge - and would therefore have to be charged with 20% VAT even tho it is for postage. So its confused me slightly, and I wondered if anyone had come across this before.
Thanks for this. That is exactly what I thought. However, someone mentioned to me .. that the sales invoice for postage from company A to company B - would be classed as 'secondary postage' like a second charge - and would therefore have to be charged with 20% VAT even tho it is for postage. So its confused me slightly, and I wondered if anyone had come across this before.
Hi Claire
I originally thought the same as yourself and Julie. However in my digging around for various VAT rules what the 'someone' mentioned to you appears to be true. Take a look at the following link:
I originally thought the same as yourself and Julie. However in my digging around for various VAT rules what the 'someone' mentioned to you appears to be true. Take a look at the following link:
