We have a VAT Group for two companies - a parent and its subsidiary. There are always more transactions in the sub than in the parent company. Once I reconcile a sub VAT return in Sage 50, I put a journal to create a VAT liability. I then do a bank transfer from the sub to the parent to pay VAT to HMRC as the VAT registration and bank details given to HMRC are in the name of the parent company. Once the bank transfer to the parent is done, the VAT liability is cleared in the sub. My issue is with recording these transactions in the parent company - do I need to create intercompany debtors and creditors to record sales and purchases tax in the parent but once I create the VAT liability , the tax on sales and purchases nominals are cleared to zero in the sub.