UK Paying costs of another company so VAT can be reclaimed

[mcplums]

Hello,

My company (company A, UK company) is hosting an event in the UK with company B (based in USA), and company B will ultimately pay for it. However, we would like to pay for the event initially so we can reclaim the VAT, and then be reimbursed by company B at the ex VAT cost. Is this legal?

It seems that it probably isn't, unless we added VAT to the 'reimbursement' income which would mean company B is effectively paying the same than if they paid the invoice directly?

Thanks!

 

[Williams Karl]

Its better to take the advice of a professional lawyer who expertise in tax related fields. One of my friend who lives in Paris, got stuck in one of the same situations and his company was hosting an event in other town. He consulted with the best lawyer form the sources like
36avocats.com/annuaire/bechara-tarabay
and asked all his doubts regarding the VAT and invoices. It can also help you with the same by hiring and getting advice from a lawyer.

 

[Julia Satin]

Hello,

My company (company A, UK company) is hosting an event in the UK with company B (based in USA), and company B will ultimately pay for it. However, we would like to pay for the event initially so we can reclaim the VAT, and then be reimbursed by company B at the ex VAT cost. Is this legal?

It seems that it probably isn't, unless we added VAT to the 'reimbursement' income which would mean company B is effectively paying the same than if they paid the invoice directly?

Thanks!

Hi,
As the company A here is acting as an agent of the company B it is perfectly legal if A pays the invoice and then recovers the full amount, inclusive of VAT, from B.
A cannot claim this VAT amount in its own VAT because the costs ultimately are not borne by A. However, B cannot seek a refund either because the invoice from thr third party here was not addressed to B.
The better way would be for B to pay the invoice and then recover VAT amount via electronic refund scheme for business based outside the EU.
If you have any further questions, please, feel free to ask.