An unusual situation re VAT

[blindswelledrat]

I have a VAT registered company and an individual/sole trader owes the company some money, which includes 20% VAT.
This individual is not VAT registered and is doing some work for us.
Is there anything wrong with crediting him instead of payment for the work? The benefit to him being that he will save 20% which is the VAT element of our invoices.

[blindswelledrat]

What am I missing. If I issued a credit to him, it would be for X plus VAT.
Or is your point that I am not allowed to issue a credit note of X plus VAT ?

[blindswelledrat]

I assumed that would be the ultimate answer for the reason you implied but I cant quite understand why not.

All the time we issue credit notes as a company in the course of business for various reasons but largely 'goodwill' but for whatever reason we are withdrawing our invoice as such.
Would your answer be the same if we had agreed prior to any invoicing to simply exchange services for free without any invoicing?

[blindswelledrat]

Cheers all. Pretty categorical and the only point to it was to save him a couple of hundred quid. Definitely not relevant by the sound of it.