This subject has been causing confusion for the whole 40 years we have been operating VAT in the UK. There are a number of issues to consider.
The fundamental question that any supplier of goods or services should address is: do the goods or services I am recharging to my client / customer form part of my supply? If the answer is 'yes' the goods or services being recharged have the same VAT treatment as the main supply. If the answer is 'no', it is possible they could take their usual VAT liability e.g. zero- rating for books, aids and adaptations for people with disabilities; exemption for insurance and financial services, or they could be treated as disbursements, which are outside the scope of VAT.
Another helpful way of deciding the correct treatment is to ask: to whom is the relevant supply made, which is subsequently recharged? Is it to the person making the recharge, or to the ultimate customer?
As with any principles, the best way to understand them is through examples.
An accountant from Birmingham visits a client in London and travels by train. The purchase of his train ticket constitutes a zero-rated supply of passenger transport, but as the supply is made to the accountant, not his client, the fare forms part of his main supply of accountancy services to his client. Therefore, the recharge is standard rated.
A solicitor providing conveyancing services to his client, pays a Land Registry fee on his client's behalf. As the cost is actually the direct responsibility of the client, the solicitor can treat it as a disbursement, meaning no VAT is due on the amount recharged.
A housing association owns a block of flats and rents them out to tenants (exempt from VAT). It also recharges the cost of the upkeep of the structure and common areas of the block e.g. cleaning of stairwells, gardening. Even though the services bought in from the cleaners and gardeners are standard rated, the service charge passed on to the tenants is considered part of the housing association's supply of accommodation and is thus also exempt from VAT. Note that this does not apply to services supplied to a tenant's individual flat e.g. repairs. Those services take their usual VAT liability (normally standard rated).