Forum Message

Insurance Claim

Mark

We recently had some tools stolen from one of our vans and made a claim on our insurance policy. The insurance company has just sent us a cheque which I have banked in the Company's current account.

How would you record that inward payment ? It is not strictly Revenue so we do not want to see it increasing our Sales. The amount will be used to purchase replacement tools.

How should we treat the VAT element of the money received ?


Posted by Alan Rick on Oct 2, 2011 1:40 AM BST

Hi Alan,

To record the theft, create a new expense account called 'Loss due to theft' then create a General Transaction from the tools asset account to this loss account.

To record the insurance payout create a Money Received transaction from the 'Loss due to theft' account to the 'Cheque Account'. I think such payments are 'Out of Scope' for VAT purposes, but you should check this with your accountant or HMRC.

When you buy the tools record an asset purchase as normal.

Regards,


Posted by Mark McLaren (Solar Accounts) on Oct 2, 2011 2:45 PM BST

Thanks for your prompt and helpful response - as always


Posted by Alan Rick on Oct 2, 2011 10:41 PM BST

No problem - glad to hear you like our support!


Posted by Mark McLaren (Solar Accounts) on Oct 3, 2011 9:44 AM BST

Hi

I believe you just open a new account in the income section and ignore the vat element because it is exempt from vat


Posted by Wayne Bettess on Oct 3, 2011 6:17 PM BST