Readers' forum: Homeworkers

I act for a UK company jointly owned by two women who live in Moscow. The company is not VAT registered in the UK and does not have any UK premises or staff. The trading activity is consultancy work advising Russian businesses that want to set up a UK branch all done by the women from their homes in Russia. I do the year-end company accounts and file them with Companies House and a separate business in Cyprus does the bookkeeping work. My office is also the registered address of the company. The Cyprus-based bookkeeper has asked that I invoice her rather than the company – I suspect so that she can add a mark-up to my fee and make a bit of extra money. The Russian owners are happy with this proposal.

My concern is VAT: should we not charge VAT to the Cyprus business under the...