Pass-through item
A pass-through item is an amount collected in the name and for the account of a third party and then passed on; it is neither income nor expense and is not subject to VAT.
Definition
Typical cases are fees a fiduciary pays for the client and recharges, or contributions an association collects for a federation. What matters is that the amount flows without a mark-up and recognisably for a third party.
If a mark-up is charged, or the business acts in its own name, it is no longer a pass-through item but turnover — with the VAT consequence. That line is crossed regularly in recharges.
What the software must be able to do
You need an account with no effect on the result and a tax code without tax, plus the ability to show the item on the invoice as a disbursement. Whoever books it as turnover at a zero rate distorts both turnover and the VAT return.
Checked Aug 2026
More terms under Bookkeeping and retention: Accrual principle Accrued liabilities Annual accounts Association accounting Balance sheet Balance sheet total Book value Break-even point Business assets Business expenses Cash book Cash flow statement Cash receipts Contribution margin Cost centre Current assets Debit and credit Depreciation Double-entry bookkeeping Duty to keep accounts EBIT EBITDA Equity Equity ratio Financial year Fixed assets Fixed costs Foreign currency General ledger Gross profit Hidden reserves Income statement Inventory count Journal Journal entry Liabilities Liquidity Loss carry-forward Membership dues Net profit Opening balance sheet Overheads Prepaid expenses Provision Record-keeping ordinance Reserves Retained profit Simple accounts Swiss SME chart of accounts Tamper resistance Turnover Value adjustment Variable costs Volunteer-run structure Voucher Year-end closing modules