A CE has been agreed between the Client and Contractor under NEC4 Option contract. The contractor is correctly claiming for hire costs and has submitted the relevant invoices. However, the contractor is claiming the gross value of the invoices in the CE. I believe this is incorrect. Can you please confirm if the contractor should be claiming net without VAT. Thanks
Yes, it should be net of VAT in almost all circumstances. The only exception I can immediately think of would be where there is a very small company or sole trader without VAT Registration who can’t therefore reclaim VAT on things they buy.
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Thank you. So it’s the fact that they’d be reclaiming VAT as a company and also getting paid the VAT amount within the CE.