Hi Silly Digits

Don't think there is going to be any easy answer to this, you already have your doubts about the legitimacy of the transactions, which in its self leaves you a bit vunerable.

Assuming there is no VAT connection between the two companies (A group registration).

If you haven't already, I would ask the director about it, before considering other options. I notice you said you presume he wants you to reclaim the VAT. It may be just possible he didn't know he couldn't do it (unlikey I would have thought but you never know)

As it is a new separate company, have you done the normal MLR due diligence checks? I am sure you would need to even if it is the same director, as there may be other directors involved etc.

The reason I ask is that there is also the higher risk of money laundering, with funds swapping between two companies with the same director. If he insists you claim the VAT illegally, you are immediately placed in an awkward position, with regard to VAT fraud and money laundering because you already have a suspicion, which in it self is reason enough to make a report.

It's a bit doom and gloom for a lovely, sunny Sunday but like I said at the beginning, the first thing to do is check with the director.

Just to add an edit. The bottom line is make sure you protect yourself

Bill




-- Edited by Wella on Sunday 7th of March 2010 02:04:15 PM

Bill

Thanks for your reply. I only do the books for the company no1 at present.

I will query with director, and if I am still not happy I will not put in.

Thanks

You can only put VAT through if the VAT invoice is addressed to the company. If directors or employees use their own cr/dr cards and put these in as expenses, even if the VAT receipt is attached you cannot reclaim the VAT.