VAT on joint venture

[WidgetsUK]

Hi I am a director of VAT registered company, another VAT registered company that I have had close dealing with over the past 10 years would like to jointly fund a business dev person to further both of our businesses. The original idea would be to invoice for services from one company to another however, this would be liable to VAT from my understanding. Does anyone know better or have any suggestions?

Many thanks

[les35]

You are correct; if you charge for business services, then that is taxable.
But a loan is not taxable, and interest charged is exempt from VAT. You could make a low-interest loan. Or, perhaps a capital injection.
But needs a discussion with your Accountant, to check any Direct Tax implications.