I have a colleague who has almost finished developing a website that introduces part-time/developing musiscians to industry professionals. The website allows a basic music track to be uploaded and the client chooses from a roster of guitarists/keyboard players/singers etc to play on the track. My colleague then produces the finished result so that a professional production is the achieved. The musicians get a cut of the fee.
My question is, once the business reached the VAT turnover limit, is the service provided one that attracts VAT at 20%? If the musicians involved are VAT-registered will they in turn have to invoice my colleague for their fee + VAT?