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Invoice 2 separate companies on 1 invoice?

Client has requested we raise 1 invoice naming 2 separate entities in 1

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A client has asked us to raise 1 invoice addressed to 2 separate legal entities, both part of the same group but separate none the less. They don't want us to raise 2 separate invoices, 1 for each, with half the cost on each. Would this constitute a valid invoice for VAT and/or accounting purposes? 

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ghm
By TaxTeddy
23rd May 2022 16:27

I would say you have to follow the contractual arrangement.

Who could you sue for payment if you are not paid? Which ever company it is (or both), that's the one to invoice.

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By David Ex
23rd May 2022 16:28

Which client is the contractual client/customer?

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By CJaneH
23rd May 2022 16:29

I would raise two invoices with the narrative on the invoice explaining clearly the total charge and the half.

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By Leywood
23rd May 2022 16:47

Did you ask why?

When clients suggest daft things the question always has to by why? Then you can have a sensible discussion with them and put them off or suggest a workaround as appropriate.

Have you seen the contract?

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Replying to Leywood:
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By lucybrown162
24th Jun 2022 13:43

We have found out that the companies are joint trustees of the property which we are to work on

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By DKB-Sheffield
23rd May 2022 16:57

Is perchance one company VAT registered, and the other not? Does one company have never-ending losses, with the other being profitable (perhaps not the issue with a 'group' though).

That may answer the 'why'?

As for whether you 'should'? That is a different matter entirely. As others have said, probably more of a contractual question.

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Replying to DKB-Sheffield:
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By lucybrown162
24th Jun 2022 13:44

I don’t know their vat status, but they are joint trustees of the property we are to work on

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VAT
By Jason Croke
23rd May 2022 20:14

You can only make a supply to the contracted customer, if you are making a supply to two different companies you need two different invoices.

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Replying to Jason Croke:
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By Tax Dragon
24th May 2022 09:48

+1

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Replying to Jason Croke:
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By lucybrown162
24th Jun 2022 13:45

They are requesting 1 invoice to both as they are joint trustees of the property we are to work on, I have since found out. Not sure if this changes anything on the VAT issue or not

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paddle steamer
By DJKL
24th May 2022 09:11

Invoice one entity and it can cross bill the other if it so desires.

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Replying to DJKL:
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By Tax Dragon
24th May 2022 09:48

-1

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Replying to Tax Dragon:
paddle steamer
By DJKL
24th May 2022 11:39

Well unless you contracted with more than one entity at the outset it is likely the only option open.

When we are party to larger common repairs (a roof or similar ) we generally enter into a distinct contract with the roofer for our share of the cost ,to be billed to us directly and paid by us to him directly. In our most recent one (now delayed due to scarcity of Spanish slate) I insisted on this approach re our 24% of the total cost before signing up to the repairs (I did not want the commercial risk of our funds going into a collective bank account with the other property owners, the other commercial property owner in the tenement took the same approach)

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Replying to DJKL:
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By Tax Dragon
24th May 2022 11:53

Ah, good point. OP asks a question but doesn't say who or what the work was for. Sorry, I missed that. So I retract my +1 -1. If one customer, issue one invoice; if 2 customers, it's 2 invoices.

Edit: I reallocate my +1 to TaxTeddy's initial reply.
Edit2: though Jason's "if" means I (still) agree with him also.... in fact reading through I think I pretty much agree with everybody. I spread my +1 to all as if it was love.

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Replying to Tax Dragon:
paddle steamer
By DJKL
24th May 2022 12:04

Have you ever played Mario Party with its distribution of stars at the finish?

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Replying to DJKL:
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By Tax Dragon
24th May 2022 12:20

That the pre-lockdown version you're talking about, of course. In more recent versions, it's penalty notices that get distributed at the end (apparently at random).

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Replying to Tax Dragon:
paddle steamer
By DJKL
24th May 2022 12:06

Duplicate

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Replying to Tax Dragon:
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By lucybrown162
24th Jun 2022 13:47

I have since found out the request is due to the companies being joint trustees of the property, we are doing survey works on. Not clear if the trust side changes any of the recommendation

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Replying to Tax Dragon:
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By Paul Crowley
24th Jun 2022 14:59

Brilliant subversion
Missed it as I went on holiday and do not engage when not in UK

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By fawltybasil2575
24th May 2022 10:18

@ lucybrown162 (OP).

Arguably one could possibly (with careful thought) prepare one invoice, in accordance with the legislation, addressed to two separate entities, in such a way as to make it clear what amount is payable by each entity and the VAT payable by each entity. Such possibility is however irrelevant since it is not normal practice and imposes on one an unreasonable burden.

The only reasonable response therefore is to respectfully point out (to the person making the request for one invoice) that “in order to comply with the legislation, and to comply with standard invoicing procedures, two invoices MUST be issued, one for each customer”.

As has also been stated correctly above, the invoices must reflect the reality of the goods and/or services supplied to each customer. One can therefore only divide the overall amount to be invoiced EQUALLY between the two customers if such 50:50 allocation accords with the facts (I have not seen anything in your initial question which supports such 50:50 allocation).

Basil.

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Replying to fawltybasil2575:
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By lucybrown162
24th Jun 2022 15:08

Would both companies being joint Trustees of the property we are working on, change your advice at all Basil? I have just found out this aspect today, after going round the houses several times with the client's representatives

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By john hextall
26th May 2022 11:34

I don't think that is even philosophically possible. Who gets chased when it isn't paid? Who reclaims the VAT? Whose accounting system does it go into?

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Replying to john hextall:
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By lucybrown162
24th Jun 2022 13:49

See above further comments around their joint trustee status

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By Tax Dragon
24th Jun 2022 15:15

The trustee point is on this thread:

https://www.accountingweb.co.uk/any-answers/can-we-invoice-joint-trustees

(To me it is a separate discussion - I agree with OP - not a continuation of the one here.)

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