10/07/2025
Disbursements and recharges are common in the education and child classes sector. Think exam fees, dance costumes, music books, or trip payments you collect on behalf of parents.
But do you know how these could impact your VAT position?
If you're not careful, what looks like a simple reimbursement could be treated as income and push you closer to the £90k VAT threshold, or worse, trigger a VAT bill you weren’t expecting.
🔹 A disbursement is when you’re just passing on the cost — exactly what you paid, clearly listed, no VAT added, and doesn’t count towards your turnover.
🔹 A recharge is when you mark it up or bundle it into your service — VAT may apply and it can count as taxable income.
Dance classes invoicing for costumes, tutors collecting exam fees, or clubs charging parents for day trips. If you're not sure how to treat those costs, it's time to double-check.
The wrong treatment could mean paying tax on money that isn’t really yours.
Need help getting it right?
Swipe the carousel or send us a message — we’ll talk you through it.