I carry out £3000 of work for you and say you carry out £2000 of work for me. Instead of both parties invoicing their respective amounts plus vat, I just to invoice the difference (£1000 + vat).
Nureyev
Replies (2)
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No.
If the businesses are VAT registered, HMRC will insist that invoices are raised for the full value of both supplies.
Regards
Paul Taylor
Dains
VAT is chargeable on the value of the supply
The value of the supplies in a case of part-exchange, which is what you have set out, is the value of the supplies made for a consideration, whether that consideration is in money or in services.
VAT is therefore due on 3k and 2k.