Indirect rebilling

As a service company, I normally invoice the client for expenses of a project such as travelling, hotel and subsistence as a daily lump sum which has been previously agreed in a quotation. When inputting the purchase, I tag each expense incurred against the client project, but should the category be the actual type of overhead:- Hotels, Subsistence etc. or should it be classed as a Direct Expense category such as Miscellaneous Expenses as it will be indirectly rebilled to the client? I don’t think the Rebilling Expenses feature is appropriate, as each expense item will not be billed separately but as an agreed daily rate. The additional complication is where a member of the client’s staff is invited for an evening meal during the trip. Strictly speaking this should be classed as entertainment, which has both VAT and Corporation tax implications, however as the client company is effectively paying for that meal anyway, how should that particular expense be handled to comply with the legislation?

Hello @MartynB

When inputting the purchase, I tag each expense incurred against the client project, but should the category be the actual type of overhead:- Hotels, Subsistence etc. or should it be classed as a Direct Expense category such as Miscellaneous Expenses as it will be indirectly rebilled to the client?

The category you select is where the expense will be posted to in your accounts, if you are unsure where to post it, please refer to your accountant as I am unable to give advice on this type of query as I am not an accountant nor bookkeeper.

I don’t think the Rebilling Expenses feature is appropriate, as each expense item will not be billed separately but as an agreed daily rate

You are welcome to start a feature request for anything you would like to see, as many features start from a suggestion on the forum and we try to cater for as many scenarios as we can.
It is designed to try and save time, in that it enters the data into a sales invoice screen for you rather than you having to manually enter it from scratch. When the data is carried across for you it is all editable and relevant changes can be made if required.

The additional complication is where a member of the client’s staff is invited for an evening meal during the trip. Strictly speaking this should be classed as entertainment, which has both VAT and Corporation tax implications, however as the client company is effectively paying for that meal anyway, how should that particular expense be handled to comply with the legislation?

To comply with the legislation, professional advice should be sought from an accountant.

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