Passing the VAT of Costs to your Customer

If you want to pass on the costs you made to your customer, it is important to pay close attention to VAT. The easiest way is to record the costs  in Gekko and import them directly into your invoice. This way, everything is handled correctly.

VAT Rate

Which VAT rate should you apply when recharging? The answer: your standard VAT rate. So if you normally charge 21% VAT, you should also charge 21% VAT on the passd on costs.

Even if, for example, the original expense was a train ticket with 9% VAT, you still charge your usual rate of 21% VAT.

Why? Because you are not a public transport company charging 9% VAT. You are providing a service to your customer, and that service includes these costs, so you charge 21%.

These passed on costs are part of the overall service you provide to your client, and you apply your usual VAT rate. When you import costs into your invoice using Gekko, the system will automatically apply 21% VAT, so everything is set up correctly from the start.