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My biggest worry is as one company is on cash accounting and the other one is'nt so over the 4 years the vat have paid to us in reclaims around £40k, What do I need to do to make sure that everything stands up to scrutiny, I know over that period its probably nothing unusual to reclaim that sort of money but if they come in and say it as to be paid back it would be impossible.
We always generate an invoice for the ledger, the bank statements show intercompany transfers, I'm a bit sceptical about the contra's though, i.e in retrospect I am wondering now is it right to include these invoices as inputs/outputs then contra them months later
What we have done is obviously documented fully and genuine but it would appear that we could have done this on a massive scale, am I being a bit nieve or is the vat system that easy to beat.