CRG5400 - Financial redress: Fees and VAT

Many costs that we reimburse to customers carry VAT, which should be dealt with as follows:

• if the customer is a VAT trader and the VAT will be accounted for in the VAT return as input tax, reimburse the net amount only (but see next bullet point)
• if the customer operates the flat rate scheme they will not be able to claim the VAT as input tax, so reimburse the gross amount, including VAT
• if the costs we are paying are not related to the customer’s trade, or if the customer is not a VAT trader, reimburse the gross amount.

Paying agents direct - where, exceptionally, you decide to pay an agent or other third party direct (CRG5275), include in the payment any VAT that has been charged. Contact CCAST in any case of doubt or difficulty.