1

I'm a UK-based sole trader who regularly buys products and services on behalf of clients (e.g. hire photographers, buy stock images, etc.) and I invoice them for these costs after.

Should the cost of these products and services be deducted from my declared income or do I include them and then claim them as allowable expenses?

Is there anything specific I should include on my invoices to clients to make this clearer, or anything else I should be aware of?

  • ISTM that the amount which you invoice the customer is income, and the amount it cost you is an expense. As for telling your clients... heck no!!! This stuff stays strictly in your accounting software. – RonJohn Oct 22 '17 at 10:54
1

Assuming you buy the services and products beforehand and then provide them to your clients.

Should the cost of these products and services be deducted from my declared income or do I include them and then claim them as allowable expenses?

You arrive at your final income after accounting for your incomings and outgoings ?

regularly buys products and services on behalf of clients

These are your expenses.

invoice them for these costs after

These are your earnings.

These are not exactly allowable expenses, but more as the cost of doing your business, so it will be deducted from your earnings. There will be other business expenses which you need to deduct from your earnings and then you arrive at your income/profit. So before you arrive at your income all allowable expenses have been deducted.

include on my invoices to clients

VAT if you charge VAT. Any charges you require them to pay i.e. credit card charges etc. You don't need to inform clients about any costs you incur for doing your business unless required by law.

If you are unsure about something browse the gov.uk website or obtain the services of an accountant. Accounting issues might be costly on your pocket if mistakes are committed.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.