Paid too much!

[deforce]

A friend of mine recently formed his own company and began trading whilst waiting for his VAT registration to come through. He was invoicing the agency on a weekly basis (exc. VAT), and receiving his money promptly. When he received his VAT registration he raised an invoice for the back VAT due (2 weeks worth) and sent it to the agency. The agency promptly sent him the equivalent of exactly 6 weeks worth of VAT and an automated remittance advice note for the amount not detailing how it was made up. At the end of last month they sent him the same amount again with another remittance note. So, he has now received the equivalent of 10 weeks worth of VAT he was not due, £k's.....
They have paid him the normal amount of VAT on his invoices since week 3....
What should he do?
Obviously, he does not want to tell the agency they have paid him too much and pay the money back.
Can he put it through his books and what would be the best way of doing this?

[malvolio]

Dunno - my chart of accounts doesn't have a column for "Stolen Money".

[Ardesco]

Whack it in a high interest account and leave it there until they realise thier mistake. They will eventually and will then ask for it back.

Bear in mind if they have classified it all as VAT they are going to claim it back from the VAT man, so they will realise within 3 months max (unless they are really crap)

[triboix]

Whack it in a high interest account and leave it there until they realise thier mistake. They will eventually and will then ask for it back.

For the sneaky one, that's the best thing to do. As far as taxes are concerned, only the invoices are important, not the actual amount paid (or not paid!).

[triboix]

Obviously, he does not want to tell the agency they have paid him too much and pay the money back.
Can he put it through his books and what would be the best way of doing this?

He may not advise the agency, but if they claim their money back, he's better off paying it back. They will very easily sue him and win without problem.
For his books, only invoices are important. So he should put only the invoiced amount and the invoice VAT.

Disclaimer: IANAL, IANAA, so he should seek legal advice.

[deforce]

Dunno - my chart of accounts doesn't have a column for "Stolen Money".

How can this be classed as "stolen money"?
He never asked for it, the agency just paid it to his company bank account, it's their screw-up....
He's happy for it to rest in his company bank account for a year or so.
He is just looking for advice on how it can be drawn out, e.g. raise an invoice for a 'bonus' and just not send it to the agency?

[oraclesmith]

Talk to them about paying it back. It's VAT and belongs to the VAT man. Don't mess with the VATman!

[MarillionFan]

If I come round your house and leave my wallet. It doesnt belong to you does it. Now I would hope you would tell me, or when I get home and realise I havent got it, I'll go looking for it. When I realise its at your house I'll ask for it back with all the money still in it. If you keep it, thats stealing.

Simple enough for you?

[deforce]

Talk to them about paying it back. It's VAT and belongs to the VAT man. Don't mess with the VATman!

Hmmmm....
That's where it gets interesting! Sure, the agency will view it as VAT, but as far as his company is concerned it has received and paid out all of the VAT due on it's invoices. This is 'extra money' that appeared in his company's account....

[ratewhore]

Surely someone will use the analogy of a plumber or builder - come on people!!!