Friend has set up a website, through which jewellers can sell their jewellery. My friend's company (X Ltd) acts as an agent to facilitate the sales of the jewellery and charges commission, subject to VAT, for acting as the agent.
How should the invoicing work in this transaction? X Ltd has just had its first sales and it's being queried with the jeweller. Should:
1) The jeweller raise an invoice in their system for the full amount and X Ltd raise an invoice to the jeweller for agency services (if so, who does the jeweller invoice?), or;
2) X Ltd raise an invoice to the customer. The jeweller raise an invoice to X Ltd for the full amount. X Ltd raise an invoice to jeweller for the commission (in this case charging VAT to the customer could be logistically tricky as some jewellers won't be registered for VAT), or;
3) Another method (just a little confused as to how the end customer should be invoiced)
I work in industry where the invoicing is much more straightforward so any assistance would be really appreciated!