VAT on disbursements

It has always been a matter of debate as to whether IPs should charge VAT when invoicing a case for disbursements and expenses they have incurred or paid on behalf of the case where the underlying service or supply is not vatable, such as postage. The answer according to a VAT inspector during a recent VAT inspection to a practice is that VAT should always be charged, except in respect of the specific penalty bond. You may wish to check this, either with your own internal VAT department or your local VAT office before adopting this approach.