Cross-border VAT

We act on behalf of a small UK company that is not VAT-registered but is selling some goods to a company in Spain. Somewhat bizarrely the Spanish company has said that it cannot complete the transaction unless our client has a UK VAT number.

Our thought was that the need for a VAT number was to enable the supplier to check whether a customer is VAT-registered not the other way around. Is it perhaps because there is no Spanish VAT threshold for an overseas business so our UK client must be VAT-registered in at least one EU country?

Would it be better for our client to register for VAT in Spain because it does not want to have to charge VAT on UK sales (some of the customers in this country are private individuals) which would be the case if the company had a UK...