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HMRC internal manual

VAT Valuation Manual

Specific applications: Services incidental to supplies of goods: disbursements

In certain trades and professions all or some of the costs incidental to a supply may be described as disbursements and separately shown or charged on the invoice issued to a client. Not all such items qualify for treatment as disbursements for VAT purposes.

However, subject to certain conditions, if the trader merely pays amounts to third parties as the agent of his client and debits him with the precise amounts paid out, he can treat these as disbursements for VAT purposes. These amounts do not form part of the value when calculating the VAT due upon the main supply to the client. Full guidance upon disbursements can be found in VTAXPER: Taxable person.

There are special arrangements for solicitors which are outlined in VATVAL13200.