Sorry, no this doesn't help me. I understood all of the above beforehand. Let me explain again.
I am meeting a commercial client who will want to reclaim VAT on purchases. The fact that I am not VAT registered may put him off? For example, I place various orders(on his behalf-he pays me, I then pay the supplier) of £30,000 plus VAT. My client will want to reclaim the VAT as he is a business, but as I am not currently VAT registered he won't be able to reclaim? Is there any way he can reclaim the Vat back on purchases I make? Many thanks, Lauren
Not unless you are registered also, Lauren. VAT is a turnover tax which passes up and down the transaction chain with each successive invoice until it reaches a consumer who is not registered and trading (ie the boy who buys and eats the ice cream). That is when the VAT roundabout stops so to speak,
However, there is a way around this which would enable the commercial client to reclaim the VAT were you not registered. If arrangements could be made for you to place the orders on his authority and have him billed directly by the suppliers then the difficulty would be avoided. Suppliers would be paid and he would recover the input tax.
Thank you for your answer. Can i just clarify if my client paid the invoices, for example the cost on one was £100 plus VAT, would he be able to claim the full amount of VAT back? I'm sorry its all rather new to me! Also the fact that this is a new build project, does that make a difference please?
I'm good at design, just not great at tax!! many thanks.