This question is very similar to several I have received recently regarding ‘is this a disbursement?’, ‘is there VAT on recharges’, ‘is there VAT on a reimbursement?’, ‘do we charge VAT on expenses?’ etc. But this particular question will focus on cross charges between companies.

The underlying issue at hand is whether the amount of money your client is requesting from, or paying to, another party is consideration for a supply of goods or services made by the recipient of the monies.