Thanks for the help. My problem was caused by not using the "Items" tab when recording the initial purchase. All sorted now. After charging back the client, I checked my account details; the initial charge does not show up as an expense item and the income received to pay back for the item does not appear as turnover for my flat-rate VAT calculation. The "Other Current Asset" account shows the amount going out (for the purchase) and then the same amount coming in to balance the account (for the reimbursement). Excellent!