An unusual situation has arisen with one of my clients, and not one i've come across before.
They are VAT registered, and VAT is applied on each sales invoice raised for the goods/services they provide.
A flight was booked and paid for by my client on behalf of a supplier. The supplier must pay for the flight and asked my client to invoice them. The original flight did not include VAT however as a sales invoice has to be raised to the supplier, is my client expected to include VAT on this Sales invoice? Or are there circumstances when a VAT registered company can raise a zero rated sales invoice?
Yes you need to add VAT to the sales invoice which your supplier (or customer I guess in this case) will simply claim back on their return. Net effect is zero but action is needed to appease HMRC.
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