What if the debtor’s insurers pay?
If you make a supply to a debtor who is insured for the costs of that supply (for example when a garage repairs a damaged vehicle), for convenience the insurer may pay you direct. If the insured is VAT registered the VAT exclusive amount is usually paid. If the customer does not pay you the VAT element, you can only claim relief on the actual balance written off. Any payment is to be treated as in paragraph 3.2.
