# Charging and invoicing VAT question



## johnnyguitar (Mar 24, 2010)

Question - I have been asked to quote for a pair of jobs (not detailing related in the slightest btw!), one that I'd do and one I'd and then one I'd get another guy to do. I'm VAT registered and he's not - if I submit a VAT invoice for the total work, the other fella can then give me an invoice for his total charges. I assume that as he's not VAT registered, although he pays VAT to HMRC, I won't be able to reclaim VAT on what I pay him - is that right?

Sorry if that sounds a bit confused, I've not contracted work out to anybody before but I've been asked to provide a service that I can't do myself.


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## organgrinder (Jan 20, 2008)

Since your subcontractor is not VAT registered, he doesn't charge you VAT, you don't pay him VAT and you do not reclaim anything.

You have to charge VAT on everything you invoice to your customer though, including the amount you are billing for your subcontractor's work.

It makes no difference though and you will end up with exactly the same net of VAT income.


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## Maggi200 (Aug 21, 2009)

I just skim read that and saw subcontracting. Not quite sure what it is you do but you may need to consider CIS which seems to confuse most people but is actually very, very, very simple.


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## wookey (Jul 13, 2007)

He should invoice you without VAT, and you shouldn't be paying him any VAT if he isn't VAT registered. But you can invoice your customer with VAT if you are VAT registered.

I'm in the construction industry, my subbies who aren't vat registered invoice me a Gross Total less tax. I do an overall invoice to my customer with VAT added and tax deducted (CIS).

I get paid my total + VAT -the tax. I then pay my subbies their gross total less tax - if that makes sense, no VAT comes into with their money.

PM if you want


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## johnnyguitar (Mar 24, 2010)

I understood organgrinder's post, but you pair have just confused me!


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## organgrinder (Jan 20, 2008)

johnnyguitar said:


> I understood organgrinder's post, but you pair have just confused me!


If it is of any help, I am an accountant and do this for a living!

You can ignore any problems with subcontractors unless you are in the construction industry since they have special rules but regardless, VAT would be dealt with in the same way as noted in my first post.


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