Should a VAT-registered farmer charge VAT on unrelated consultancy work?
My client is a small sole trader business. He is registered for VAT and the VAT certificate describes the business as “mixed farming”.
The client has recently sold his 50% stake in a separate company. As part of the sale agreement he has been providing consultancy services on a self-employed basis to the new company owner. My client has not charged VAT on these services which I believe to be an error.
HMRC have told my client that he does not need to charge VAT on the consultancy service and that his treatment of his invoices was correct.
My understanding is that the client is VAT-registered as an individual and should charge VAT on all his trading activities. Who is correct?
I understand that the customer my client is providing the consultancy service to cannot fully claim input tax. Consequently if VAT is payable on the income ...
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