Agency Paid Me Twice

[GammaMadrid]

Thats the CUK Christmas party sorted.

[TheCyclingProgrammer]

The accounting is very simple, it's a sales refund (without VAT, since it wasn't included originally).

I’m not sure it’s a sales refund as you aren’t refunding a sale (there’s no amount sitting in a debtors account due to a raised invoice that corresponds with the other payment). It’s simply an overpayment.

I think you can either let this sit as a credit balance on the trade debtors account (if you agree to keep it as payment towards a future invoice) or add it to a creditor account until it’s repaid (which will reverse that transaction).

[jamesbrown]

I’m not sure it’s a sales refund as you aren’t refunding a sale (there’s no amount sitting in a debtors account due to a raised invoice that corresponds with the other payment). It’s simply an overpayment.

I think you can either let this sit as a credit balance on the trade debtors account (if you agree to keep it as payment towards a future invoice) or add it to a creditor account until it’s repaid (which will reverse that transaction).

I wouldn't call it an overpayment as such, simply an incorrect payment. There are various ways to handle it, such as creating a sale against which to issue a refund of sale or creating a credit note against which to assign future invoices or issue a credit note refund. You could also assign the incoming payment to the contra account and then reverse it when refunded. Depends how you want to track it.

https://www.freeagent.com/glossary/contra-account/

[Lance]

Why?

on the very slim chance that the agency don't notice, and then OP gets to keep it.

[vwdan]

on the very slim chance that the agency don't notice, and then OP gets to keep it.

The problem is that there's a long old period where they can come and ask for it back - I'd certainly never feel comfortable spending it.

[Lance]

The problem is that there's a long old period where they can come and ask for it back - I'd certainly never feel comfortable spending it.

Indeed. Putting yourself into a position that you can't return it would be unwise.

It would be reasonable, if/when they ask, to say 'yes fine I'll pay that back at the next payment cycle (ie. end of the month)'.
You'd have to pay CT on it as well if you had it at your year end.

[vwdan]

Indeed. Putting yourself into a position that you can't return it would be unwise.

It would be reasonable, if/when they ask, to say 'yes fine I'll pay that back at the next payment cycle (ie. end of the month)'.
You'd have to pay CT on it as well if you had it at your year end.

So what do you do with it? You can put it in "high interest" savings accounts and make pennies, I suppose - just seems a lot of hassle for you to wind up looking dishonest

[WLB2018]

Let the agency know and let them decide on what they want to do. They will almost certainly ask for it back (as others have posted) but they may also allow you to keep it and simply pay any difference the following month (doubt it) but have heard of it happening to another contractor.

WLB

[jamesbrown]

So what do you do with it? You can put it in "high interest" savings accounts and make pennies, I suppose - just seems a lot of hassle for you to wind up looking dishonest

Agreed, it's a terrible idea. It's not how proper businesses operate. OP should simply return the money once they're aware the mistake has been made, i.e. now. Saves being correctly labelled as a dishonest chump further down the line, as well as reopening a closed accounting period.

[Batcher]

I don't have my agency's bank details so if it were me I would contact them to let them know they had overpaid and ask for their bank details so I can repay it.

I would then contact my accountants and ask them for advice on how to account for it on their system.

It's a bad idea to even think about keeping it and pleading ignorance.