Working for a customer with an insurance cash settlement ( VAT)

[morgan8080]

My husband is doing a full house renovation after a house fire, the customer he knows and has done previous work. He was asked to sort all this out and project manage the job and other sub contractors. The insurace would only pay out / or let him be the contractor  if he was VAT registered the customer said so we quickly did this as we would have been doing it in a few months due to threshold , we have an accountant who is doing all books , VAT etc.They initially said if he wasnt vat registered they would only pay the sum minus vat

The VAT number was given to the customer and then the insurance who then said they would pay out the claim minus the VAT and pay that at 3/4 of way through on receipt of photos of work / invoices.

The customer is deducting 20% off every invoice we add , materials and labour. Shouldn't the customer be paying the invoiced total and then await the rest of their money 3/4 of the way through. It isn't for the contractor to be at a loss while going through the work / cash flow issues as he still has to be out

Is this right?? just unsure at present