How to Re-charge Expenses to Clients on an Invoice

What Expenses Can You Recharge?

Any genuine business expense incurred on behalf of a client can be recharged: travel, accommodation, materials, software, printing, etc. But the VAT treatment depends on what the expense is.

Format on Invoice

Services Provided: £2,000
─────────────────────────
Expenses:
- Travel to client site (3 days): £300
- Materials (printing, binding): £150
- Accommodation: £200
─────────────────────────
Subtotal: £2,650
VAT @ 20%: £530
TOTAL: £3,180

VAT on Expenses

Expenses charged to client are subject to VAT if you're VAT registered:

• Materials: Standard VAT (20%). You paid VAT on them; customer reimburses full cost including VAT.
• Travel/accommodation: Standard VAT (20%).
• Subcontracted services: Standard VAT (20%).

You can reclaim the VAT you paid on the original purchase from HMRC, so the net cost to you is fair.

Common Mistakes

• Charging expenses without documentation (keep receipts)
• Not disclosing expenses upfront (agree in writing before incurring)
• Charging profit on expenses (charge cost only, not markup)
• Missing VAT receipt (can't reclaim VAT without it)

FAQ

Can I mark up expenses?

Generally no, unless agreed upfront (e.g., "admin fee of 5% on expenses"). Standard practice is pass-through at cost.

What if I spent £200 on materials but only used £150?

Only charge £150. Don't charge leftover materials.