My client is a vehicle repair and servicing garage operating as a ltd co. One of their own vehicles was struck whilst parked and the insurance company agreed for them to carry out the repair work themselves. They invoiced the insurance company (deducting the policy excess and VAT) and were duly paid. The policy excess was then recovered at a later date from a specialist company. Am I correct in thinking that my client needs to invoice itself for the excess and VAT, enter a dummy receipt and payment to clear the Sales and Purchase ledger invoices and then enter the policy excess recovery as a (real) bank receipt? If not, how do I correctly account for the VAT? Thank you.