Chuffed to hear that. But you have blown my theory and got me scratching my head nonetheless.
As the original inclusive amount was R115 (which included R14 in VAT), it seems to me if the company bills the client R115 + VAT, they'll nett R14 over and above their costs that they seek to recoup.
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Just another curved ball here.
If you are acting as an agent, and collecting the funds on the behalf of your customers supplier, why do you have you raise an invoice with VAT from your customer, and claim from your suppliers invoice?
If you are not charging for the service then in effect you have not provided for a service and are therefor not entitled to collect the VAT on the service that you are acting as the agent. You can however raise an invoice with VAT for the services provided.
I have a situation in which I vend prepaid electricity. When the client purchases the electricity, I make a request from ESKOMs server, they raise an invoice and provide a pin number for the purchase. ESKOM then sends me an a VAT exempt invoice for the value which I purchased for. The story here with ESKOM is that they made the sale between ESKOM and the final customer, and that I only acted as the agent in facilitating the financial transaction. I only raise VAT on the commission made on the sale.
I suggest that you contact SARS and see what they say about this, rather than getting involved in the whole debacle of VAT raised and so forth.
If it is a private person dealing with you in this manner, it simply would raise the cost of the transaction when you start adding VAT on the zero rated amounts.
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Cost to Audrey was R101 + R14 VAT
For a recoupment she should charge the same.
If it was an overseas flight, Cost would be say R2000 + Zero VAT + 100 airport tax
Her recoupment invoice would be cost R2100, VAT R294
Another scenario
Car hire R1000 + R140
Fuel R750
Her invoice should be cost R1750 + VAT R245
So really, in the absence of any markup, all she should be doing is invoicing the actual cost to company, plus VAT.
Audrey H (04-Jun-14)
Last edited by Dave A; 04-Jun-14 at 09:21 AM.
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Audrey H (04-Jun-14)
Sorted. Thank you so much!
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