Im a sole trader in the entertainments industry nd registed on the Flat Rate Scheme for VAT. I frequently have artistes perform at my shows for an agreed fee set in advance. Most of these people are not regisitered for VAT. But maybe 1 in ten are and they often ask me to pay VAT on to op the fee ageed (even where it was expressly stated that the fee "includes any VAT"). My question is: Are there any provisions or exemptions when the invoicee and the invoicer are both on the FRS?
I ask because when I pay an artsist VAT on top, I cant claim any of it back and so it repsresents an extra cost to me. Equally I think they are required to invoice me for 20% VAT but under FRS will only actually be apying 12.5%.