A client company sells and installs specialist electrical systems on existing domestic properties. The client receives a card from the company after completion of the installation offering to pay £100 to the client for each new referal that leads to an installation. The new referred client also receives a payment of £100. For the referring client this is not a credit on the installation cost and the client could receive payments for referals several months or years in the future, so cannot be linked to the installation.
I am uncertain what the VAT position of these payments would be for the company - my assumption regarding the initial referal is that there is no VAT as it is an "input" from a private individual who is not VAT registered. I suspect that the position for the client being referred would be slightly different as the payment is a direct result of the installation (but is only paid after completion and after the client has paid the full system cost to us).
Any advice or help would be appreciated.
