Morning all, I've received a cheque this morning from the liquidators of a company that went insolvent in 2006.
The debtor balance was written off in 2006 and I would like to know how to treat this receipt with respect to the P&L, BS and VAT treatment.
To further confuse matters, the claim put in to the liquidators was for £4,894.52 inclusive of VAT, subsequent to this claim a credit note was raised to the customer for "retention of title" for £4,328.70 inclusive of VAT leaving a Debtor balance of £565.82. This balance was written off to Bad Debts and Bad Debt VAT relief was claimed.
The cheque received this morning was for £997.42 which is more than the final balance written off!
