Readers’ forum: Tax point rules and VAT registration

I act for a client who has his own limited company – A Ltd – which is not registered for VAT. He has been doing some project management work for a good friend who has his own company B Ltd. The latter company is involved in several property projects. My client’s friend agreed that A Ltd could raise an invoice for £50 000 to B Ltd in June 2021 for ‘work done so far’ – which was paid in October 2021. The second fee of £60 000 was paid to my client in April 2022 but he did not issue an invoice to his friend until June 2022. This was because it kept his invoiced sales below £85 000 for the year ended 31 May 2022. A Ltd has received no other income since it was incorporated apart from the final fee of £40 000 from B Ltd ...