VAT question

antijoke · 11 Jul 2017 at 10:21

Quick question (hopefully) about VAT.

We have three parties, charity A, freelancer A and company A.

Say freelancer A is non VAT registered, this company wins a tender to provide a website to charity A. They can't provide what is needed so approach company to do the work.

All goes well, it comes to invoicing and company A who are VAT registered send a VAT invoice to freelancer A.

What happens in that scenario as freelancer A is not VAT registered?

I hope that makes sense.

john_s · 11 Jul 2017 at 21:05

Freelancer A pays invoice + VAT to company, then invoices charity for invoice + VAT + his markup?

Martynt74 · 12 Jul 2017 at 10:20

Yep, just because they're not vat registered doesn't mean they don't pay VAT. Just means they can't offset it and claim it back.

antijoke · 12 Jul 2017 at 14:10

Thanks, that what I thought.

I think there's been a communication barrier breakdown between company a and freelancer a on final costs as neither thought of the non VAT registration status when quoting.