VAT not being declared
I am currently working in a small ish practice where there is one partner.
I have been working on a client who owns one company (X Ltd) and half of another company (Y Ltd) and they are trading with each other. We act for both of these companies. Y Ltd submitted it's final VAT return in September 2012 and is now ceased.
When completing X Ltd's accounts this year (Oct 2012) I noticed that there is about £100,000 worth of extra Purchases in X Ltd from Y Ltd, than there was in Y Ltd Sales ledger to X Ltd (I looked on their sage to compare). Therefore, X Ltd have claimed about £17k worth of Input VAT which Y Ltd has not declared as output VAT. The complitation is that Y Ltd has now ceased.
My boss is saying just to leave it for now but I think this is dreadfully wrong! I need to put my foot down but I obviously don't want to do it too much. Also, the boss is friends with this client which makes it a little more delicate!
I really just want advice on what I SHOULD do (I'm guessing that I should amend Y Ltd's FInal VAT return with the extra VAT?) and then if it is decided to not do that should I report this and to whom?
Any help is appreciated as I find myself in a very strange and unknown position.
- Edible spam? 781 16
- effective advertising 179 4
- I'm thinking of moving to Ireland 277 5
- Cloud Based Software recommendations please 120 2
- Put fees on website 247 6
- Director resignation 181 4
- Nominal Code for Car lease? 167 7
- s75 ICTA88 Management expenses - idiots guide 1,507 27
- Can't find a good web address 118 1
- Mobile phone and P11D 1,282 4
- Sigma Red 1,396 3
- CIS Software Recommendations 339 5
- VAT on medical/care services? 95 2
- Definition of "relative" in benefits code 169 2
- Live Chat on Accountancy Website 444 6
- Should we let the Client Call the Shots? 492 7
- VAT Variation Team 198 3
- Sage help please 305 4
- charges for storing documents 201 1
- Share scheme annual returns problem 95 1
- Straight line write off of Purchase Goodwill ??? 475
- Has anyone been affected by the RBS payment breakdown? 460
- WIP Software 332
- No payroll scheme in place 286
- Is there anything wrong with this? 255
- Do subcontractors on work for residential (student accomodation) construction 250
- Small Part Disposal of Property 226
- Uncommercial property business 218
- Apple Employees - RSU vesting and tax witheld 189
- SA Penalty 180