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Hello Ildiko,
Sorry I haven't spotted your question earlier, with no replies.
Is the problem that your client has received a purchase invoice from the employment agency for introducing him to the employer who is now engaging him ?
If so, the VAT charged can be reclaimed, as the agency has merely supplied an introduction, and is not providing a medical service direct by their own actions.
This is quite separate from your client billing the employer for their own skills, which would be exempt.
Q - why is your client VAT registered ? Is there other types of trading activity going on within the limited company ?
Hope this helps to start with.
Don't forget that you can always use the VAT helpline at Southend for a specific ruling (record the call reference number) and then you have a defence if a compliance audit tries to challenge your tax submission.
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