Thank you for your response. I will concur with your view and treat accordingly.
(Still trying to get my ex-wife to accept that my view was fact in several matters)

The credit on our rental system says "Credit for additional costs" not refund of fees.
This was an agreement between our property manager and the landlord, I was wasn't aware or consulted.
This is outside our normal T & C's.

Unfortunately I don't put much faith in our external accountants, the ones that told my predecessor that we didn't need to raise intercompany invoices - just post journals and reclaim the VAT that way!

But no supply has been made, it is to compensate the landlord for additional costs he incurred due to our error.

Thank you.

You say default is normally standard rated but following the links above I read it that the default would be Exempt.
It is effectively insurance for the landlord and covers them for up to 8 weeks rent (as opposed to 5 weeks rent held within deposit scheme).
I think I will treat exempt and confirm with external accountants when I am next dealing with them (we are only talking about £34 this month and don't think there will be massive take up)

On the commission statement they go on to say "We cannot provide VAT advice in relation to this commission payment"

So we cannot even know whether they are accounting for VAT at their end.

I will email them and see what they say.

I have exchanged emails with the other bookkeeper (wanted everything in writing).
They have reclaimed all of the VAT without recharging it as that is what the accountants said to do! "as both of us are VAT registered it would be ok to do it this way"
I have some interesting conversations to have with the directors and accountants.
Next year I will encourage them to invoice the individual entities.

Thanks Jason.

That confirms my thinking.
I will check with the other bookkeeper as to what they have done and what they are doing in respect of the recharges.
The company that the invoice is addressed to operates on the margin scheme for VAT (car sales) so their VAT is more complex than mine.

The invoice is addressed to the one company that I have no sight of.
Maybe I should gently check what VAT they have claimed.

One of the companies has ceased trading and I was on the verge of de-registering for VAT, think I will hold fire until this has been clarified. Recharge to this company is around £5k for 2 years accounts so VAT very relevant.

Thanks for your reply.
There isn't a VAT group (thank goodness) hence my concern.
One of the companies isn't VAT registered.

It was the fact that they separately itemized the tax returns on the invoice that I queried it.

Back in the 1980's I recall a client turning up with a brace of rabbits he had shot that morning!
The senior partner seemed delighted.