Hello I wonder if anyone can help with the following:
If you have Company A and Company B (Both separately Vat registered), (Both with the same Directors), but different types of work.
There are 2 scenarios I am a little uncertain about:
Firstly:
Company A receives a Purchase Invoice including VAT for Stationery for example.
Company B pays the bill in error.
Do I purely post the whole amount to the inter company loan account, showing that Company A owed Company B some money, with the total amount being a loan?
Secondly:
Company A raises a Sales Invoice including Vat.
Company B receives the funds from the customer in error.
Does Company A just post the total amount to the inter company loan account, showing that Company B owed Company A some money?
Or does some sort of invoicing have to go on in order to reclaim it, and if so, is the VAT added on top of the whole amount, or can it be split as it was net and Vat originally?
There have been a few queries of this nature on this site, but I couldn't find one that answered the above.
Many Thanks in Advance
Carolynne
Replies (5)
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The simplest
solution is, as you say, to take the gross amounts to the inter-co loan account. There are no VAT complications.
VAT group
Why not be a vat group and file one return? Inter-company transactions are then outside of the scope of VAT.