Vat: Relocation Costs
The economic downturn has forced (and even been the excuse which many businesses have used for) downscaling by finding cheaper premises or even relocating to another town or city.
In instances where the relocation is to another location in the same town or city, it is usually not necessary for the employer to pay for relocation costs for the staff. However, in the instances where the relocation is to another city or town, it is the norm for employers to pay a percentage of the costs (it’s a good idea to have a relocation policy in place before you start the process though).
This would also apply in the instances where, say, a branch was being opened in another city or town and staff were being relocated and/or transferred in order to meet the staffing requirements at the new branch or indeed, if an employee was being relocated as part of a promotion. In fact it would apply in any instances where it was the Company’s requirement that the employee relocate.
The question is whether the VAT charged or paid to the removal company can be claimed, and the answer is, “Yes it can”.
The relocation of a staff member to another branch of the company or to another location, because that is where the company is going to be operating from, is a cost that is raised in the ‘course of enterprise’, which means it is an operating cost. Therefore the input VAT can be claimed on all relocation costs.
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