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