An odd question on VAT invoicing
Discussion
For reasons that I don't quite understand, a developer client of mine who is not VAT registered, wants me to invoice him the gross amount but as a net figure.
So for example if my invoice would naturally read £10k plus £2k VAT totals £12k, he wants me to send him a £12k invoice with no element of VAT in it.
When pushed as to why he isn't quite sure but something to do with him charging the invoice on to someone else but that he cannot include VAT.
Anyway, Im sure I know the answer to this but is it very wrong for me to do that, even if you assume I record it my end inclusive of VAT and pay the appropriate VAT element of it?
So for example if my invoice would naturally read £10k plus £2k VAT totals £12k, he wants me to send him a £12k invoice with no element of VAT in it.
When pushed as to why he isn't quite sure but something to do with him charging the invoice on to someone else but that he cannot include VAT.
Anyway, Im sure I know the answer to this but is it very wrong for me to do that, even if you assume I record it my end inclusive of VAT and pay the appropriate VAT element of it?
blindswelledrat said:
For reasons that I don't quite understand, a developer client of mine who is not VAT registered, wants me to invoice him the gross amount but as a net figure.
So for example if my invoice would naturally read £10k plus £2k VAT totals £12k, he wants me to send him a £12k invoice with no element of VAT in it.
When pushed as to why he isn't quite sure but something to do with him charging the invoice on to someone else but that he cannot include VAT.
Anyway, Im sure I know the answer to this but is it very wrong for me to do that, even if you assume I record it my end inclusive of VAT and pay the appropriate VAT element of it?
If you are VAT registered then you must add VAT. As he is not registered he cannot claim the input value and cannot charge his client VAT. It sounds like he is trying to artificially inflate the VAT to cover the loss he will have to bear highlighted in bold.So for example if my invoice would naturally read £10k plus £2k VAT totals £12k, he wants me to send him a £12k invoice with no element of VAT in it.
When pushed as to why he isn't quite sure but something to do with him charging the invoice on to someone else but that he cannot include VAT.
Anyway, Im sure I know the answer to this but is it very wrong for me to do that, even if you assume I record it my end inclusive of VAT and pay the appropriate VAT element of it?
Gassing Station | Finance | Top of Page | What's New | My Stuff